Things are looking rosy indeed for Verizon Wireless. They’ve announced their expectation that the iPhone will lead to between 5-8% growth in earnings per share. Analysts predict 11 million sales in 2011. The iPhone boom will spur Verizon to double the percentage of their customers with smartphones. The carrier could be above 50% by the end of the year.
Since customers with smartphones spend more on data usage, this is more good news for Big Red’s bottom line. The company forecasts revenue growth of between 4 and 8%, with analyst predictions dogging behind at 2%.
It’s easy to get lost in all that PR pomp. Verizon’s Q4 was far from bad, but they did miss their forecasts. Q4 revenue for the company was down 2.6% from 2009. This is in spite- or perhaps because of- the 900,000 subscriber increase Big Red saw this quarter. 3/4ths of those new subscribers bought smartphones. And smartphone customers come with subsidies attached.
That has a considerable downward pull on a companies earnings. Verizon doesn’t seem worried about the same thing happening with the iPhone. Maybe they should be.
[Via Verizon Press Release]