Verizon Chief Financial Officer Fran Shammo told analysts on the company's conference call that sales of the iPhone and other high-end LTE smartphones put pressure on profit margins, due to the subsidies. But he added that eventually the cost of the subsidies will pay off, since these customers will subscribe to more expensive data plans. And for LTE customers, the fact that the company is able to move these subscribers to a more efficient network will also eventually help Verizon increase profitability.
But some analysts are skeptical, They believe that Verizon and other major wireless service providers selling the iPhone and other high-end devices may never recover from the cost of these subsidies, The reason is that most subscribers are on an endless upgrade cycle for newer devices, which means carriers are never able to make back the cost of their phone subsidies, Craig Moffett, an analyst with Sanford Bernstein, wrote in a research note today that three years ago AT&T found itself with depressed profit margins due to the iPhone, But even though the company has promised that those margins would rebound over time due to higher service revenue from iPhone customers, the reality is that those margins have still olixar colton iphone xs max 2-piece case with screen protector - black reviews not come back..
"Now, it's Verizon's turn, and the same question looms," he said. "Is the iPhone margin effect transitory, or is it a 'new normal'?". Moffett said that an endless string of Apple upgrade cycles could keep margins from rebounding for far longer than anticipated. In this scenario, he said that the "earnings pop will always be a year away.". Moffett also pointed out that that equipment sales were what boosted Verizon Wireless revenue during the quarter and not service contracts. "Reported revenue growth was hugely boosted by the sale of wireless equipment - all those iPhones. Excluding these equipment sales (that is, measured as a service provider), proportionate organic revenue growth is still sub 2.0%..and EBITDA growth on the same basis is negative on both a proportionately consolidated basis and in the all-important Wireless segment.".
On the wireline side of the olixar colton iphone xs max 2-piece case with screen protector - black reviews business, Verizon continued to lose money on its traditional voice business, But it is growing its data services, It added 201,000 net new Fios Internet broadband connections and 194,000 net Fios TV customers in the fourth quarter, The company ended the year with 4.8 million Fios broadband customers and 4.2 million Fios TV customers, Updated 7:35 a.m, PT: Details from the company's conference call and comments from an analyst were added to this story, The company blames noncash pension charges and added costs associated with the Apple iPhone for hurting its bottom line in the fourth quarter of 2011..
Despite strong sales in wireless and its Fios broadband products, Verizon Communications posted a quarterly loss, which it attributed to noncash pension charges and high costs associated with selling the Apple iPhone. The company today reported a fourth-quarter loss of $2.02 billion, or 71 cents per share, compared with a profit of $2.64 billion, or 93 cents a share, during the same quarter last year. Excluding a noncash pension-related charge, it earned 52 cents per share. Analysts had expected the company to earn 53 cents per share.