NEW YORK — Verizon Communications Inc. yesterday said it was seeing little effect of the turmoil in the U.S. economy, reporting higher fourth-quarter earnings that were largely in line with expectations.

There has been speculation on Wall Street that telecommunications companies, which have been branching out from their old business of providing utility phone services, would be more sensitive to a recession this time around. AT&T Inc. reported an increase in disconnections in the last three months of 2007, but Verizon appears to be holding up better.

"We have not seen a change in our sales expectation through January," said Chief Financial Officer Doreen Toben.

AT&T is the nation's biggest telecommunications company by revenue; Verizon ranks second.

Verizon also reported reaching a milestone as a TV provider, saying it had 943,000 subscribers to FiOS TV at the end of the year and more than 1 million now.

The service, delivered over fiber-optic lines in parts of 13 states, is Verizon's way of countering the threat from cable providers that are siphoning off phone customers. Verizon lost 10.6 percent, or nearly 3 million, of its residential phone lines last year. However, cable companies are adding phone subscribers much faster than Verizon is adding television subscribers: Comcast Corp. alone has more than 3.8 million phone customers.

Verizon earned $1.07 billion, or 37 cents per share, in the October-December period, compared to $1.03 billion, or 35 cents per share, a year earlier.

Excluding charges, the latest earnings were 62 cents per share, matching the average forecast of analysts surveyed by Thomson Financial.

The charges included severance costs related to layoffs — 4,000 employees were cut from the rolls in the fourth quarter, and Verizon expects to cut 5,000 more from the wire-line division in 2008. The New York-based company has been steadily cutting its wire-line workforce, which ended the year at 161,000.

"We have been rapidly shifting our force to the growing pieces of our business, that is FiOS and our wireless business, so both of those will continue to grow in force," said Chief Operating Officer Denny Strigl.

Last year's earnings figure includes a loss on the sale of Verizon's operations in the Dominican Republic. Excluding that loss and special items, earnings in last year's fourth quarter were also 62 cents per share.

Revenue for the most recent quarter came to $23.8 billion, up 5.5 percent from $22.6 billion a year ago but slightly below the average analyst forecast at $23.96 billion.

Verizon shares rose 35 cents to $38.11 yesterday as the overall market rose.