Q4 results upbeat for vendors, not so for carriers

Verizon and SBC posted mixed fourth-quarter results, while equipment vendors Nortel and Avici both saw top-line growth.

Verizon this week logged a fourth-quarter loss of $1.5 billion, or $0.53 per share, that includes $3.1 billion in special items - primarily $2.9 billion in previously announced costs associated with a voluntary separation plan under which more than 21,000 employees left the payroll in the quarter.

Excluding special items, Verizon earned $1.6 billion in the quarter, or $0.58 per share, which bested analyst estimates by 2 cents.

Fourth-quarter revenue was largely flat at $17.3 billion, up only 0.7% from the prior year's quarter.

For the year, Verizon posted earnings of $3.1 billion, or $1.11 per share, or $7.3 billion - $2.62 per share - before special items. Operating revenues totaled $67.8 billion in 2003, a 0.7% increase from 2002.

For SBC, both earnings and revenue were lower. The RBOC recorded fourth-quarter net income of $905 million, or $0.27 per diluted share, compared with $2.4 billion, or $0.71 per diluted share, in the fourth quarter of 2002.

Revenue totaled $10.1 billion, compared with $11.2 billion in the year-earlier period.

SBC's full-year net income was $8.5 billion, or $2.56 per diluted share, compared with $5.7 billion, or $1.69 per diluted share, in 2002. Revenues were $40.8 billion, compared with $43.1 billion in 2002.

Equipment vendors aren't feeling their customers' pain, apparently. Nortel posted fourth-quarter revenues of $2.8 billion, compared to $2.5 billion for the fourth quarter of 2002 and $2.3 billion for the third quarter of 2003.

Nortel netted earnings of $499 million, or $0.11 per common share. For the same period a year ago, Nortel lost $168 million, or $0.04 per common share, while posting a profit of $185 million, or $0.04 per common share, in the third quarter of 2003.

For the full year, Nortel’s revenue of $9.8 billion was down from $10.6 billion for 2002. Net earnings came in at $732 million, or $0.17 per common share, compared to a net loss of $3.3 billion, or $0.85 per common share, for the year 2002.

Nortel expects a seasonal decline in revenue for the first quarter of 2004 compared to the fourth quarter of 2003.

Nortel partner Avici Systems saw substantial top-line growth for the quarter and the year. Gross revenues for the fourth quarter and full year were $11.5 million and $39.4 million, respectively, compared to $7.3 million and $33.1 million in the comparable periods a year ago.

These represent an increase of 57.5% compared to the prior year's fourth quarter and an annual increase of 19%.

The company also trimmed its quarterly and year-end losses. Net loss for the fourth quarter was $3.9 million, or $0.32 per share, compared to a net loss of $14.1 million, or $1.13 per share, in the prior year's fourth quarter.

Avici's net loss for the year was $37.0 million, or $3.02 per share, compared to $64.8 million, or $5.20 per share, for the same period a year ago.

This story, "Q4 results upbeat for vendors, not so for carriers" was originally published by The Edge.

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