Verizon CFO expects little Q3 iPhone margin fall-out
NEW YORK, Sept 12 |
NEW YORK, Sept 12 (Reuters) - Verizon Wireless will not take a big hit to its wireless profit margins this quarter from the Apple Inc iPhone 5 launch this month, according to Fran Shammo, the Chief Financial Officer of parent company Verizon Communications.
And the short-term revenue decline from the company's new data share plans will be lower than Shammo had feared because customers are buying bigger buckets of data than expected, the executive said during an investor webcast on Wednesday .
The new plans, which allow families to share one data plan, and the iPhone launch had been concerns for some investors ahead of Verizon's third quarter results.
Verizon Wireless and its rivals AT&T Inc and Sprint Nextel all pay Apple hefty subsidies for each iPhone they sell so that they can give consumers discounts for the phone in exchange for tying them into two-year contracts.
Shammo told an investor conference that the Sept 21 launch is too late in the quarter to result in a "huge detriment" to margins.
He also said that any margin pressure from the popular phone would depend on whether there is enough supply available to meet demand.
But if volumes are high in the fourth quarter then Verizon Wireless profit margins will be reduced he said without giving a specific estimate.
Verizon Wireless is majority owned and controlled by Verizon Communications. Vodafone Group Plc has a minority 45 percent stake in the venture.
Vodafone investors often complain about the fact that Verizon Wireless rarely pays a dividend to its owners.
Shammo declined to say when the next dividend will be but told the investor conference that the company is required to discuss whether it will pay a dividend at the last board meeting of the year.
Verizon shares were up 1.4 percent to $44.84 after Shammo's remarks.
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