Verizon reports strong growth while IBM falls
VERIZON reported strong fourth quarter growth in its Verizon Wireless joint venture yesterday while IBM, the world’s largest technology services company, reported its seventh straight quarterly decline as demand for its services continues to fall.
Verizon’s shares fell 1.3 per cent yesterday to $47.7, which analysts attributed to profit taking ahead of its $130bn buyout of Verizon Wireless from Vodafone which is due to close at the end of February, rather than disappointment at its results.
“If anything, the results we saw this quarter show nothing impacted them,” said New Street Research analyst Jonathan Chaplin.
Verizon reported a profit of $5.07bn on revenues of $31.1bn during the quarter to 31 December, compared with a loss of $4.23bn the previous year caused by the impact of pension-related charges.
“We look forward to acquiring sole ownership of Verizon Wireless, the best asset in the global wireless industry, and leveraging all our assets to deliver innovative products to customers and more value to shareholders,” said Verizon chief executive and chairman Lowell McAdam.
Yesterday Verizon also announced that it will buy chipmaker Intel’s startup internet TV service, OnCue, for an undisclosed sum.
IBM’s revenue fell five per cent to $27.7bn in the fourth quarter, missing analysts expectation of $28.25bn, causing the company’s share price to fall nearly a per cent at the close of trading.
This is the fourth straight quarter that the company’s revenue has fallen short of analysts’ targets.
“In view of the company’s overall full-year results, my senior team and I have recommended that we forgo our personal annual incentive payments for 2013,” IBM chief executive Ginni Rometty said in a statement.
IBM’s profit beat expectations at $6.2bn for the quarter, up from $5.8bn from the same period in 2012.
IBM’s share price closed at $188.43 last night after the news, but continued to fall a further three per cent during after hours trading.