Verizon Profit Drops; Carrier Plans 8,000 Job Cuts

Second-quarter net income fell to $1.48 billion, or 52 cents a share, New York-based Verizon said today. Pension and acquisition costs amounted to 11 cents. Verizon, which trails only AT&T Inc. in total subscribers, said sales rose 11 percent to $26.9 billion, boosted by Verizon’s purchase of Alltel Corp.

Revenue from Verizon’s global enterprise business dropped 6.7 percent. U.S. employers trimmed almost half-a-million jobs in June, shrinking the pool of possible customers. Verizon, which has more than 235,000 employees, said today that it will pare the workforce in its declining wireline business, slashing expenses as the economic slump lengthens.

The enterprise business’s drop “suggests that we’re nowhere near out of the woods in this recession,” said Sanford C. Bernstein & Co. analyst Craig Moffett in New York. He expects Verizon’s shares to lag behind the rest of the market. Moffett is the only analyst surveyed by Bloomberg who advises investors to sell the stock.

Excluding some costs, profit was 63 cents a share, in line with the average estimate of analysts in a Bloomberg survey. A year ago, second-quarter net income amounted to $1.88 billion, or 66 cents.