TECH
01/22/2013 06:50 am ET Updated Mar 24, 2013

Verizon Q4 2012 Sees $1.93 Billion Loss, With Hurricane Sandy Partially To Blame

Jan 22 (Reuters) - U.S. telecommunications group Verizon Communications Inc posted a $1.93 billion quarterly loss on pension liabilities and superstorm Sandy-related charges that took the shine off a jump wireless business revenue.

Shares of the company fell more than 2 percent to $41.55 in trading before the bell.

Operating margin at the telephone company's wireless business, which accounts two-thirds of total revenue, rose slightly to 24 percent.

Verizon and other mobile services providers subsidize smartphones for new customers and as a result are facing margin pressure due to rising costs.

Wireless services revenue for the fourth quarter grew 8.5 percent to $16.4 billion, while retail service revenue jumped 8.4 percent to $15.8 billion.

Verizon Wireless, the company's mobile venture with Vodafone Group Plc, is the biggest U.S. mobile service provider.

Verizon Wireless said in November it would pay a total dividend of $8.5 billion to its two parent companies.

Capital spending for the year was $16.2 billion, including $135 million related to Sandy recovery efforts, and was in line with 2011 spending.

Like rivals AT&T Inc and Sprint Nextel Corp, Verizon is spending billions of dollars to upgrade its network to support booming demand for services like web surfing and video on smartphones like Apple Inc's iPhone.

Verizon Communications reported a loss of $1.48 per share, compared with a loss of 71 cents per share a year earlier, when it posted a loss of about $212 million.

Excluding one-time items, Verizon reported a profit of 38 cents per share.

Revenue rose 4.5 percent to $30.05 billion.

Analysts expected a profit of 50 cents per share and revenue of $29.83 billion, according to Thomson Reuters I/B/E/S.

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