Verizon Raises Estimates After Ending NorthPoint Deal

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Verizon Communications

(VZ) - Get Report

raised its earnings forecast for 2001 and 2002 after terminating its agreement to acquire

NorthPoint Communications

(NPNT)

, which was disclosed

yesterday.

Verizon, which was formed by the merger of

Bell Atlantic

and

GTE

, targeted 2001 earnings per share growth of about 8%, or earnings of $3.13 to $3.17 a share. Eighteen analysts polled by

First Call/Thomson Financial

produced a consensus estimate of $3.08 a share for 2001. Verizon said it had previously expected earnings, including dilution resulting from the NorthPoint merger, of $3.06 to $3.10 a share.

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For 2002, Verizon is now expecting EPS growth of about 12%, with full-year income of $3.49 to $3.54 a share. The First Call earnings estimate for 2002 is $3.51 a share. The company previously targeted earnings of $3.41 to $3.46 a share, including the effects of the NorthPoint acquisition.

Verizon also said its target range for fourth-quarter earnings remains 76 cents to 78 cents a share, compared with First Call's 17-analyst estimate of 78 cents a share.

In its statement, Verizon also said it "will meet its merger commitments for expansion through a variety of means," including its acquisition of privately held

OnePoint Communications

and its strategic relationship with

Metromedia Fiber Network

(MFNX)

. The company also plans to serve its large business customers outside its current territory and will expand its network in selected locations.

Yesterday, Verizon terminated its agreement to acquire NorthPoint citing the deterioration in NorthPoint's business, operations and financial condition. NorthPoint responded by saying Verizon had no right to end the pact and said it would explore all available options.