Verizon Profits Fall as Company Spends To Improve Fiber-Optic Network
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Verizon Communications Inc., America’s second-largest telephone company, said fourth-quarter profit declined 38% because of costs to build a fiber-optic network and shed assets.
Net income fell to $1.03 billion, or 35 cents a share, from $1.66 billion, or 59 cents, a year earlier, the company said yesterday in a statement. Sales rose 26% to $22.6 billion. Taxes on the sale of assets in the Dominican Republic and other costs cut profits by 22 cents.
The chief executive officer of Verizon, Ivan Seidenberg, sacrificed profit from the wireless unit to expand Verizon’s faster network for Internet and TV service. The $23 billion investment is designed to compete with cable companies which have attracted more subscribers by offering phone service.
“You have to believe that the money that they’re spending is working,” the chief investment officer of Philadelphia Trust Co., Richard Sichel, said. “It looks as though it is.”
