Verizon lowers earnings forecast

Advertiser News Services

NEW YORK — Verizon Communications Inc. lowered its 2003 earnings forecast, blaming weakness in its core residential telephone business amid competition from cell phones and cable Internet service, as well as a jump in expenses from a new labor contract and costly preparations for a potential strike had that pact not been reached.

The nation's largest phone company also cited recent regulatory rulings that make it easier for rivals to sell local phone service using Verizon's lines, which the company is required to lease to those rivals at attractive rates.

In addition, Verizon said an increase in costs related to changes in accounting for retiree healthcare obligations will further hamper earnings. Also boosting expenses has been increased marketing to sign up new customers at Verizon Wireless, as well as rising network repair costs because of record rainfall.

Overall, Verizon now expects earnings of between $2.56 and $2.60 a share, down from earlier company estimates of $2.70 to $2.80 a share. On Wall Street, industry analysts had projected earnings of $2.73 a share for the company with revenue of $67.5 billion, according to a survey by Thomson First Call.

In trading on the New York Stock Exchange, Verizon was down $1.58, or 4.6 percent, to close at $33.13.

Verizon also has announced that, under a program to reduce the work force, voluntary separation incentives have been made available to most management employees, including about 550 in Hawai'i.

Verizon also said this week that it will let its customers in large metropolitan areas, including O'ahu, move their home numbers to a Verizon Wireless phone when a new federal rule on number portability takes effect Nov. 24.

The Associated Press and Bloomberg News Service contributed to this report.