Verizon Communication Inc. (NYSE:VZ) saw its fourth-quarter results miss forecasts today as a cellphone pricing war in the US continued to drag, putting further question marks over its planned purchase of Yahoo! Inc.’s (NASDAQ:YHOO) internet assets.
Verizon reported its third consecutive quarterly decline after six years of growth, with earnings of US$4.5bln, or US$1.10 a share, down from US$5.39bn, or US$1.32 a share a year earlier.
Adjusted earnings per share of 86 cents were below market expectations of 89 cents a share.
Revenues were also lower, falling by 5.6% to $32.34bn, although that was slightly above estimates for $32.11bn.
During the period to end-December, Verizon said it added 591,000 wireless subscribers, a 61% drop at the same stage a year-earlier.
The firm added a net 68,000 internet customers in the quarter and gained 21,000 Fios video customers.
Verizon, which has been facing rising competition, had warned that earnings could plateau in 2016 as makes changes to its wireless plans in line with rivals.
The company said today that it expected its 2017 earnings to be flat compared with 2016.
Internet expansion …
In July, Verizon said it would pay US$4.83bn in cash for the web assets of beleaguered search engine giant Yahoo in a move designed to expand its digital media offering.
But yesterday Yahoo said that the deal will now close in the second quarter, later than first quarter closure expected, as both sides continue to grapple with the fallout from two massive data breaches disclosed by the internet company last year.
The cyber hacks, announced in September and December, have cast doubt on the future of Verizon's acquisition, with hundreds of thousands of user accounts affected by the attacks.
Verizon said today that it "continues to work with Yahoo to assess the impact of data breaches."
But Yahoo beats …
Yahoo published its own quarterly results late on Monday, which beat analysts' expectations.
The company posted adjusted fourth-quarter earnings per share of 25 cents, excluding items, up from 13 cents a year earlier, and better than forecasts for 21 cents.
Revenues rose to US$1.47bn, up from US$1.27bn a year earlier, and above forecasts for US$1.38bn.
Yahoo saw a 6% fall in search revenues, but revenue from other parts of the business - such as mobile, video, and social advertising units - grew more strongly.