Summary
Verizon Communications Inc. (VZ) filed an 8-K on February 1, 2002, detailing its fourth-quarter and full-year 2001 earnings and providing a financial outlook for 2002. The company projected a strong earnings per share (EPS) range of $3.20 - $3.30 for 2002. This projection includes a positive impact of approximately $0.07 from the adoption of SFAS No. 142, which changes goodwill amortization. However, it also accounts for an estimated $0.09 increase in pension and post-retirement benefit costs and an additional $0.04 related to the September 11th terrorist attacks, plus potential changes in wireless license amortization. The financial targets for 2002 do not yet reflect the consolidation of Telecomunicaciones de Puerto Rico, Inc. (TELPRI), which became effective on January 1, 2002. The company anticipates that TELPRI's consolidation will boost expected revenue growth by approximately 200 basis points. Growth in 2002 is expected to be primarily driven by the Wireless and International segments, alongside DSL and Data Transport services. Domestic Telecom growth is projected to be flat for 2002, with a decline expected in the first half of the year. Significant capital expenditure reductions are planned, particularly a decrease of about $2 billion for Domestic Telecom operations.
Key Highlights
- 1VZ announced its Q4 2001 earnings and 2002 financial outlook via an 8-K filing.
- 2Projected 2002 EPS range of $3.20 - $3.30.
- 3SFAS No. 142 adoption expected to provide a $0.07 EPS benefit due to changes in goodwill amortization.
- 4Increased pension/post-retirement costs of $0.09 and $0.04 for 9/11-related impacts are factored into 2002 outlook.
- 5Consolidation of TELPRI, effective Jan 1, 2002, is expected to add ~200 basis points to revenue growth.
- 62002 growth to be driven by Wireless, International, DSL, and Data Transport services.
- 7Domestic Telecom segment expected to be flat in 2002, with reductions in capital expenditures of ~$2 billion for this segment.