Verizon Meets Market Expectations
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Verizon Communications Inc. kept pace with market estimates in 2000, with $1.9 billion in revenues and an 11 percent increase in its earnings per share in the fourth quarter.
Executives also gave investors a peek at what's to come in 2001 at a conference Thursday morning.
The Baby Bell made huge strides in efforts to capture the digital subscriber line and wireless markets in the areas formerly served by GTE Corp. and BellAtlantic Corp.
Verizon had a total of 540,000 DSL customers at the end of 2000, making it the largest provider in the country. SBC Communications, another Baby Bell, has approximately 519,000 customers.
The company has also started plans to build up its DSL business-class services, which officials acknowledge were lacking in 2000.
Fred Salerno, Verizon chief financial officer, said it's a common problem for any company rolling out a new technology.
"We're starting to get critical mass in DSL now," Salerno said. "The problems in DSL in the beginning were, for the most part, that it was a new service, and many times when you have a new service, you have problems getting it going."
The answer to that problem? Throw a lot of money at it.
"We have been spending a lot of money to support DSL, and lots of money in operations support systems so we can handle the large number of requests," Salerno said. "Those are the two main factors that hit us in the beginning.
Salerno said Verizon plans on adding products and services throughout 2001, in hopes of increased business-class customers. But we've got some more work to do there, Verizon's financial chief said.
The telco also made big gains in the wireless arena, with 1.2 million new customers and revenues of $4.1 billion in the fourth quarter.
Verizon plans on an even more aggressive campaign this year after winning big spectrum licenses at the Federal Communications Commission's recent auction. Again, a good market cap helped the company beat out the competition, with Verizon throwing $8.8 billion to get 113 licenses in New York, Chicago and Los Angeles, to name a few.
Verizon Communications will pick up the tab for its wireless subsidiary, plunking down a $1.652 billion down payment and paying the rest off within 60-90 days.
Officials said Verizon Wireless will pay back its parent company after the completion of its IPO, which it shelved last year when the markets started slipping. Salerno said a new date hasn't been set, but the company will closely monitor the markets and make the announcement when conditions improve.