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Verizon’s Strike Took a Big Bite Out of Profits

Verizon workers are striking to preserve strong union jobsVerizon workers are striking to preserve strong union jobs
Verizon workers striking in New York in MayPhotograph by Pacific Press LightRocket via Getty Images

Verizon Communications (VZ) reported a bigger-than-expected fall in quarterly revenue on Tuesday as the No. 1 U.S. wireless carrier took a charge related to a strike by its wireline workers and more customers opted for cheaper plans.

The company’s total operating revenue fell to $30.53 billion in the second quarter ended June 30, from $32.22 billion a year earlier. Analysts had expected revenue of $30.94 billion, according to Thomson Reuters I/B/E/S.

Verizon added a net 615,000 wireless retail postpaid subscribers during the quarter. Analysts on average had expected the company to sign up a net 784,000 new subscribers, according to market research firm FactSet StreetAccount.

Net income attributable to Verizon fell to $702 million, or 17 cents per share, from $4.23 billion, or $1.04 per share, a year earlier.


A strike by about 40,000 Verizon wireline employees, which lasted nearly seven weeks, reduced earnings by about 7 cents per share, the company said.

The earnings also took into account a non-cash charge of $2.2 billion, mostly associated with new labor contracts and the sale of local landline businesses to Frontier Communications (FTR).

Excluding items, Verizon earned 94 cents per share, beating the average analysts’ estimate of 92 cents.

Verizon said on Monday it would buy Yahoo’s (YHOO) core internet properties for $4.83 billion in cash to expand its digital advertising and media business.