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Employee reductions have once again hit Verizon Communications’ earnings.
The telecommunications giant reported Friday a loss of 7 cents per share related in part to $2.3 billion in pre-tax costs related to “incentive” packages for what it dubbed 11,000 “voluntary workforce reductions” this year. Excluding those costs, second-quarter profits were 58 cents per share, beating Wall Street’s estimates of 56 percent. Revenue fell slightly to $26.8 billion in the quarter.
Earnings were boosted in part by the success of smartphones running the Google-built Android operating system–the latest of which is Motorola’s Droid X handset, which recently launched.
During the first quarter, slowing subscriber growth in Verizon’s cell phone business–along with a one-time charge related to the U.S. health-care reform legislation–caused the company to take a financial hit. In the previous quarter, strong subscriber growth had been offset by $3 billion in costs related to layoffs.
Rumors persist that Verizon Wireless may soon enter a contract with Apple to become a carrier for the iPhone, currently exclusive to AT&T in the U.S. But in Apple’s earnings call earlier this week, executives were more opaque than ever about the future of iPhone carrier agreements. And since then, a new bit of gossip has surfaced that smaller carrier T-Mobile may be in talks with Apple.
Verizon Wireless, a joint venture in which Verizon Communications holds the majority stake, reported 86.2 million “retail” customers, the most of any U.S. wireless provider, according to the company. Its total number of customers: 92.1 million.
In Verizon’s Fios fiber-optic broadband and TV service, there was a slight uptick in new subscribers: 196,000 new Fios Internet and 174,000 new Fios TV subscribers in the quarter boosted total subscriber counts to 3.8 million and 3.2 million, respectively.
