Verizon ( VZ) is set to answer the critics who charge that the telco has turned its back on shareholders. The New York phone giant is due to report third-quarter earnings Thursday morning. Wall Street is eager to see the fine point Verizon will put on three key trends. Investors already know this much: Verizon's network spending is headed way up, while its core phone business is steadily slipping. Fortunately, the biggest encouragement for investors is that its wireless unit is building like a tropical storm. It has been a rough year for Verizon, its shares having hit a three-year low last week after dropping 11% since the end of September. But the value crowd warmed to the company this week after a Barron's article argued that bears had overstayed their welcome. The stock rose 18 cents to $30.27 Tuesday. Now Verizon is under the gun to deliver. Analysts are looking for Verizon to post net income of 64 cents a share on $18.9 billion in revenue, according to Reuters Research. Fans say if wireless subscriber growth is as stupendous as some predict -- that means north of last quarter's record high 1.9 million net new users -- then the company should have luck keeping people's focus off the ugly parts of the business. But if wireless growth shows signs of slowing or if the average revenue per user falls, the scrutiny will return to the strategy and the wisdom behind some risky investments. The No. 1 telco is making a bold bet that a transfusion of fiber optics can remake the company into an advanced digital services provider offering the triple play of TV, Internet and calling. Meanwhile, the company is rewiring its wireless network with evolution data-only, or EV-DO, gear that can deliver fast Net access to cell phones.
Even though AT&T tried a last-minute bribe of promising 5,000 new U.S. jobs to help gain support for the deal, the Justice Department filed a complaint to fight the combination of the nation's No. 2 and No. 4 wireless carriers.