Verizon Communications the telecommunications group from the United States posted a quarterly loss of $1.93 billion on charges related to Hurricane Sandy and pension liabilities that took much of the shine off an increase in revenue for the wireless company.
Stock prices for the company dropped over 2% to just $41.55 in pre-trading. The wireless business for the telephone company had an operating margin that slightly increased to 24%. This sector for Verizon represents over two-thirds of all the revenue for the business.
Smartphones are subsidized for new customers by Verizon along with other wireless mobile service providers and because of this, they are faced with pressure on operating margins because of rising costs.
Revenue from wireless services during the fourth quarter was up 8.5% to over $16.4 billion. Revenue from retail services were up by 8.4%, to end the quarter at $15.8 billion.
The mobile venture of the company with Vodafone Group, Verizon Wireless, is the largest mobile service provider in the U.S. In November, Verizon Wireless said it would be paying out a dividend of up to $8.5 billion to two parent companies.
For 2012, Capital spending reached $16.19 billion, including a Sandy recovery charge of $135 million. The total spending for the year was in line with spending in 2011.
Like its rivals, Sprint Nextel and AT&T, Verizon has spent billions to upgrade its networks to support the booming demand for different services such as video for smartphones such as the iPhone from Apple and web surfing.
A $1.48 per share loss was reported by Verizon compared to a 71 cents a share loss reported in 2011, when its total loss was $212 million. Excluding items that were one-time charges, Verizon reported a 38 cents per share profit.
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