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Verizon Suffers $2B Loss In iPhone Plan, Looking To Recover The Money In Time

Verizon is going through a rough-patch, apparently, as it announced a loss of $2.02 billion in revenue for the last quarter. The quarter witnessed the iPhone 4S launch, which was the second model to be sold under the Verizon banner. Verizon stated this week that it sold 4.3 million of iPhone 4S and 7.7 million smartphones overall.


But in the world of carriers and mobile companies, higher sales mean low profits per quarter for the companies involved. It’s because Verizon had to subsidize each handset with hundreds of bucks, hoping it will get its money back from service fees over a two year contract. It appears that Verizon acquires an iPhone from Apple for $600, which it sells in store for just $200. Will it be possible for the company to re-gain its money?

Verizon Communications Inc. stated that the iPhone effect was largely hidden by a change regarding pension plans. Thus we can account for the lost $2.03 billion, or 71% per share in the last quarter of 2011. Now compare with the net income of $2.64 billion or 93% per share a year ago. Excluding the pension issues out of the map, Verizon earned an overall 52% per share. The forecast made up by analysts wasn’t too far. They predicted 54% per share.

Source

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