This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Verizon Investors Read Between the Lines

Stocks in this article: VZ

Updated from 12:50 p.m. EST

Shares of telecom giant Verizon (VZ - Get Report) fell Tuesday, as investors digested the reality of the firm's fourth-quarter results.

Verizon's shares slipped $1.03, or 3.3%, to $29.96, reversing a broader stock market rally that saw the Dow and the Nasdaq increase 0.72% and 1.04%, respectively.

Even after posting a 15% hike in its fourth-quarter profit, and reporting healthy revenue, the firm's results suggest that there are plenty of challenges in store for Verizon.

Whereas Verizon's wireless business grew 12.3% year over year to $12.8 billion, its wireline operation was a different story.

The company's total wireline revenues, for example, slipped 2.7% to $11.9 billion, prompting at least one analyst to voice his concern.

"With all the focus on wireless, perhaps it's time for the debate to shift back to the wireline business," wrote Craig Moffet, a senior analyst at Bernstein Research, in a note released Tuesday. "Overall wireline revenues declined a surprisingly sharp percentage versus a year ago."

The analyst added that Verizon's wireline margins also dropped by 300 basis points to just 24.5%, a much worse showing than he had expected.

Verizon's enterprise wireline revenues also took a hit during the fourth quarter, casting something of a cloud over the firm's 2009 prospects.

"Enterprise results, inarguably the most cyclically exposed part of the portfolio, were perhaps the biggest story of the quarter," wrote Moffet. "Verizon's year-over-year decline of 2.2% versus our forecast of 1% suggests that things could get much worse in 2009."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs