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1/29/2003
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Verizon Meets Forecasts With $2.3 Billion 4Q Profit

Carrier offers modest optimism for 2003.

NEW YORK (AP) -- Despite treacherous turmoil in the phone business, Verizon Communications Inc. reported a fourth-quarter profit Wednesday of $2.3 billion, matching Wall Street's expectations, and offered modestly optimistic guidance for this year.

In the final three months of 2002, Verizon earned $2.3 billion, or 83 cents per share, on revenue of $17.2 billion. In the comparable period a year earlier, Verizon lost $2.0 billion, or 75 cents per share, on revenue of $17.0 billion.

Excluding one-time items, Verizon said it would have made $2.2 billion, or 79 cents per share. Analysts polled by Thomson First Call were expecting earnings of 79 cents a share before items, and revenue of $17.2 billion.

Verizon's 1% rise in revenue stands out when compared with the fourth-quarter declines announced recently by fellow regional phone giants BellSouth Corp. and SBC Communications Inc., which saw sales fall 8% and 6%, respectively.

"We achieved great progress in 2002," chief executive Ivan Seidenberg said. "Our business model proved strong enough to carry us through a very difficult economic environment and allowed us to anticipate and adapt to the unprecedented technological changes in our industry."

New York-based Verizon is the main local phone company in most of the Northeast, and increasingly is becoming a major player in long distance. It has a 55% stake in Verizon Wireless, one of the six major national cellular carriers. British wireless giant Vodafone PLC owns the rest.

Verizon said the wireless division is canceling plans for an initial public offering because the business' strong cash flow is removing the need for new sources of funding.

Verizon Wireless' revenue jumped 16.3% to $5.2 billion in the quarter, and the unit made strong showings in closely watched categories, adding 964,000 new subscribers, increasing revenue per subscriber by 6% to more than $49 and dropping its churn, or turnover rate, to 2.1%.

Looking ahead, Verizon said it expects revenue to hold steady or grow up to 2%, essentially in line with the roughly 1% increase analysts had been forecasting.

Verizon also said earnings per share in 2003 should be between $2.70 and $2.80, excluding one-time gains and losses; the consensus estimate before Wednesday was $2.80.

For all of 2002, Verizon earned $4.1 billion, or $1.49 per share, on revenue of $67.6 billion. Those figures all rose from 2001, when the company earned $389 million, or 14 cents per share, on revenue of $67.2 billion.

Verizon reduced its debt, which was a staggering $64.3 billion at the start of 2002, to $54.1 billion and said it expects the figure to fall to between $49 billion and $51 billion by the end of this year.

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