Verizon Meets Profit Estimate for Quarter but Trims Forecast
Verizon Communications Inc. reported second-quarter profit in line with expectations Monday but cut its forecast for the full year because businesses are ordering fewer phone lines amid a slowing economy.
The nation’s largest telephone company now expects per-share earnings of $3.07 to $3.12 for fiscal 2001, less than the $3.13 to $3.17 it forecast earlier, spokesman Peter Thonis said. Sales are expected to grow about 5% to 6%, down from the 7% growth forecast in April.
In the second quarter, Verizon’s earnings rose 6.9% to $2.1 billion, or 77 cents a share, matching the average estimate of analysts polled by First Call/Thomson Financial. The latest figures exclude $2.9 billion in write-downs for soured investments in other telecommunications companies and other charges for a total $3.1 billion.
Revenue rose less than 1% to $16.9 billion. Excluding some overlapping wireless properties, revenue rose 5%--less than many Wall Street analysts had forecast--amid softer-than-expected growth in sales of data and digital subscriber line high-speed Internet access services.
The New York-based company had 62.5 million U.S. phone lines in June, down 0.4% from a year ago. Job cuts by businesses, increased mobile-phone use and slowing U.S. economic growth hurt demand, Chief Financial Officer Fred Salerno said.
Salerno declined to provide a forecast for 2002.
Shares of Verizon fell $1.87 to $54.15 on the New York Stock Exchange.
Other earnings, excluding one-time gains or charges unless noted, include:
* Ingram Micro Inc., the biggest computer products distributor, reported a 92% drop in second-quarter profit to $2.6 million, or 2 cents a share, as sales fell 18% to $6 billion. The Santa Ana company had warned of weak profit in June amid a slowdown in the information technology sector that it called the worst ever. Analysts then revised their second-quarter expectations to a loss of 3 cents. The company also said its third-quarter sales and earnings could miss expectations.
* CVS Corp.’s second-quarter profit rose 6.2% to $198 million, or 48 cents a share, meeting analysts’ reduced estimates, with help from higher sales of prescription drugs. Revenue rose 11% to $5.49 billion.
* Entergy Corp. said second-quarter earnings rose 5.6% to $245.6 million, or $1.06 a share, because of a new energy-trading venture and higher profit from its nuclear plants. The results exceeded the 95-cent average estimate of analysts that had been raised from 91 cents in July. Revenue rose 17% to $2.5 billion.
* Healthsouth Corp. said second-quarter profit rose 27% to $83.1 million, or 21 cents a share, a penny better than forecasts, as it raised prices and treated more patients. Revenue rose 5.8% to $1.1 billion.
* Mirant Corp., a power-plant developer and energy trader, said second-quarter profit more than doubled to $181 million, or 52 cents a share, exceeding forecasts of 46 cents. Sales surged 114% to $7.93 billion.
