Verizon reported a net loss of $0.23 per diluted chair with adjusted earnings before special items meeting expectations at $0.54 cents a share. The special items causing this differentiation derive from the restructuring plan of the Wireline Segment. With considerable job cuts Verizon has been forced to pay close to 3 billion dollars in severance and pension package settlements. In addition there was 246 million dollars in merger integration from Alltel.
Substantial growth in Verizon is being fueled through the Wireless Segment with an additional 2.2 million wireless subscribers reported this quarter. Growth is expected to continue especially due to the new structure of wireless devices. A majority of new devices now require a data plan which has allowed Verizon to boost profits due to data services high profit margin.
Verizon is currently trading at $29.33 which is down 2.59%. This can be justified through the general pull back in the market, Verizon’s obligation to pay severance settlements, and concerns of malware infiltrating the Android application system. However these were all risks that have been factored into the model and thesis. Verizon’s continued growth, success of the Droid, and strong dividend leaves me confident in its future performance in the portfolio.