Verizon says new U.S. tax law to increase fourth-quarter earnings

FILE PHOTO: The Verizon logo is seen on the side of a truck in New York City, U.S., October 13, 2016. REUTERS/Brendan McDermid/File Photo

NEW YORK (Reuters) - Verizon Communications Inc said on Wednesday the tax overhaul bill signed into law by U.S. President Donald Trump late last year will result in a one-time reduction in net deferred income tax liabilities of about $16.8 billion.

The reduction will increase earnings for the fourth quarter and year ending Dec. 31, 2017, but will not have any impact on the 2017 statement of cash flows, Verizon said in a filing.

Verizon estimates that the impact of the law to earnings per share for the year ended Dec. 31 is about $4.10.

Analysts and investors had expected that the law, which slashes the corporate tax rate from 35 percent to 21 percent, to boost corporate earnings. Telecom companies stand to benefit because they are primarily domestic businesses.

Verizon also said it expects a separate accounting change implemented on Jan. 1, 2018 to increase pre-tax retained earnings by $4 billion to $4.6 billion.

Reporting by Anjali Athavaley; Editing by Sandra Maler and Lisa Shumaker