Verizon strike seen hitting second-quarter earnings: CFO - Metro US

Verizon strike seen hitting second-quarter earnings: CFO

By Malathi Nayak

By Malathi Nayak

NEW YORK (Reuters) – The seven-week strike by Verizon Communications Inc’s wireline workers will hurt the company’s second-quarter earnings and potentially cost up to 7 cents per share, its chief financial officer said.

The company “will see about a 5 cent to 7 cent impact to the bottom line for the quarter,” CFO Fran Shammo said at the Bank of America Merrill Lynch global telecom and media conference in London on Tuesday. The remarks were the first Verizon has made to quantify the strike’s cost.

Nearly 40,000 network technicians and customer service representatives of the company’s Fios internet, telephone and television services units walked out on April 13 after contract talks hit an impasse. The strike, one of the largest in recent years, was called by the Communications Workers of America and the International Brotherhood of Electrical Workers.

Verizon and the unions said a tentative deal reached last month includes 1,400 new jobs and pay raises topping 10 percent.

Workers returned to work on June 1.

Once the agreement is ratified in a vote scheduled for June 17, Verizon will share more details on the impact of the strike on its second-quarter earnings call, scheduled for July 26, Shammo said.

The work stoppage at Verizon stretched across several U.S. East Coast states, including New York and Massachusetts.

Verizon has shifted its focus in recent years to new initiatives in mobile video and advertising, while scaling back its Fios TV and Internet service. Last year, it launched a mobile video service targeted at millennials called go90 and acquired AOL for $4.4 billion.

It is considered a front-runner in Yahoo Inc’s auction of its web business.

Asked about Verizon’s second-round bid for Yahoo’s assets, “we’ll see whether we move forward or we don’t move forward,” Shammo said, declining to provide details.

Verizon’s stock was off 29 cents, or 0.56 percent, at $51.46 in midday trading on the New York Stock Exchange.

(Reporting by Malathi Nayak; Editing by Dan Grebler)

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