No. 1 phone company says it will meet revenue, debt reduction targets.
September 23, 2003: 8:24 AM EDT
PHILADELPHIA (Reuters) - Verizon Communications Inc., the largest U.S. telephone company, said Tuesday its 2003 earnings will fall short of Wall Street forecasts, due in part to costs of new labor pacts and weak demand for its services.
Shares of Verizon (VZ: Research, Estimates) fell to $33 in pre-market trading on Instinet, down from a Monday close at $34.71 on the New York Stock Exchange.
Verizon also reiterated its revenue and debt-reduction targets for 2003, cut its capital spending budget, and increased its forecast for wireless customer growth.
The New York-based company said it expects full-year earnings, excluding one-time items, of $2.56 to $2.60 a share, compared with previous expectations of $2.70 to $2.80.
Revenue will be flat to up 2 percent, it said.
Analysts had expected earnings of $2.73 a share on revenue of $67.5 billion, according to research firm Thomson First Call.
Verizon said it expects its wireless telephone affiliate, Verizon Wireless, to add more than 4.5 million new customers for 2003, up from its previous forecast of about 4 million.
The company added it expects 2003 capital expenditures of $12 billion to $12.5 billion, a $1 billion reduction from the high end of previous guidance of $12.5 billion to $13.5 billion.
Verizon recently entered a five-year contract with its unions that will reduce its annual expected cost increases by about 60 percent compared with the previous agreement
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