Verizon CEO: Strike May Hit Results
May 24 2016 - 11:30AM
Dow Jones News
Verizon Communications Inc. hinted on Tuesday that the
continuing labor strike may impact its second-quarter results.
The strike, which began April 13, involves nearly 40,000
employees, primarily in its landline division. The carrier has been
able to keep up with maintenance requests, but it is falling behind
on new Internet and TV installations, Verizon Chief Executive
Lowell McAdam told investors at a conference in Boston Tuesday.
Union members were picketing outside the event.
"Our managers are doing a super job out there," he said of the
nonunion employees filling in for the striking workers. "We're
doing a lot of installations but we're not doing the same volume as
we were before."
Mr. McAdam's remarks echoed that of his finance chief, Fran
Shammo, who said at a conference last week: "I would be optimistic
if I said we would be net positive" on landline Internet and TV
additions in the second quarter.
Mr. Shammo said customers looking to switch to its Fios service
are willing to wait for the strike to end, but the company loses
out on people who move and need service immediately.
It isn't clear how the strike may be affecting additions in the
wireless division, which accounts for about two-thirds of revenue.
Only about 160 of the striking workers are wireless employees. But
picket lines outside wireless stores may impact foot traffic,
analysts say.
Last week, Wells Fargo analyst Jennifer Fritzsche cut her
estimates for Verizon's second-quarter wireline division revenue by
$343 million and dropped her full-year earnings-per-share
projection to $3.91 from $3.98.
Mr. McAdam said the carrier would be more specific about the
business impacts of the strike after it ends.
The company is negotiating with union leaders with help from
officials at the Department of Labor, including Labor Secretary
Thomas Perez and federal mediator Allison Beck.
A key part of the negotiations is work rules. Verizon wants more
flexibility to relocate workers and redirect call center traffic,
while the unions are pushing for job security provisions.
A spokeswoman for the unions said talks were ongoing but
declined to comment further, citing a restriction by the Labor
Department.
Write to Ryan Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
May 24, 2016 11:15 ET (15:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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