Summary
Verizon Communications Inc. (VZ) filed an 8-K on September 14, 2011, to disclose the expected impact of recent events on its third quarter 2011 results. The company anticipates that the combined effects of Hurricane Irene and Tropical Storm Lee, which caused damage across its wireline footprint, along with a wireline worker strike in August, will negatively affect its Wireline Segment EBITDA. Specifically, Verizon expects EBITDA to be between $200 million and $250 million below previous expectations for the quarter. While the wireline segment faces these challenges, Verizon reiterated that its Wireless segment results are not anticipated to be impacted by these events. The company also provided an outlook on resolving the installation backlog caused by these disruptions, expecting to return to normal levels within approximately 90 to 100 days. Investors should note that this disclosure provides an update on expected financial performance and highlights potential operational headwinds for the wireline business.
Key Highlights
- 1Verizon expects its Wireline Segment EBITDA for Q3 2011 to be $200-$250 million lower than previously anticipated.
- 2The EBITDA reduction is attributed to repair and maintenance expenses and installation delays caused by Hurricane Irene, Tropical Storm Lee, and a wireline worker strike.
- 3Verizon anticipates its Wireline installation backlog will return to normal levels within 90-100 days.
- 4The Verizon Wireless segment's quarterly results are not expected to be impacted by these wireline-related events.
- 5The disclosure was made via a presentation at the Bank of America Merrill Lynch Media, Communications & Entertainment conference on September 14, 2011.
- 6The filing includes forward-looking statements and identifies various risks and uncertainties that could affect future results.