Verizon Pulls Plug on Mexican Standoff

Verizon (VZ Quote) threw out the kitchen sink Tuesday, raining down a staggering $3 billion in charges. But hearty investors took cover under the telco's steady earnings guidance.

The New York-based local phone giant reaffirmed 2003 "adjusted" financial projections, which call for operating profits to slump from last year's levels on flat revenue. First, however, the company rolled out a raft of mostly noncash charges to reflect accounting changes, the sale of a failed Mexican wireless investment and various severance, debt repayment and asset-impairment costs.

Wall Street shrugged off the news: The stock slipped 45 cents, to $39, remaining near the top of its robust recent range. Still, the writedowns highlight the challenges facing Verizon and its Baby Bell peers, which are struggling to curry investors' favor in the face of an eroding core local phone business, unexpected regulatory setbacks and a massive debt burden.

Tilting at Windfalls

The lion's share of Tuesday's charge, $1.6 billion, comes from an arcane accounting decision that will put Verizon on the same page as its regional Bell peers when it comes to the highly profitable but slow-growing phone book business. But the ugliest tale could be found in the unwinding of the company's Mexican wireless adventure. ...