Verizon pledges to deliver cost cutting

City A.M. Reporter
VERIZON Communications posted a weaker-than-expected wireless operating profit margin yesterday due to hefty costs from smartphones like Apple’s iPhone, but the US telephone company promised a big improvement this year as it cuts costs.

While Verizon’s fourth quarter bottom line was weaker than anticipated, investors were encouraged when finance chief Fran Shammo said yesterday that the company could be in a position to buy back shares sooner than expected and that wireless margins could rise this year to as high as 50 per cent. Shammo said that the numbers will be helped by $2bn (£1.3bn) in cost cuts at Verizon Wireless, Verizon’s mobile venture with Vodafone Group.

The company’s fourth-quarter net loss widened to $4.23bn from a loss of $2.02bn in the year-ago quarter. Excluding unusual items such as the charge from Superstorm Sandy and pension liabilities, Verizon would have earned 45 cents per share, well below Wall Street expectations.