NEW YORK (Reuters) — Verizon Communications, a leading communications services company created by the merger of Bell Atlantic and GRE, today raised its earnings forecasts through 2002 to reflect the termination of its plans to buy a controlling stake in NorthPoint Communications Group Inc.
Verizon said its previous earnings forecasts included costs related to the proposed NorthPoint deal. Yesterday, Verizon canceled its $800 million pact to buy a 55 percent stake in NorthPoint due to deterioration in the finances of the high-speed Internet access company.
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Verizon said it now expects profits in 2001 to grow about 8 percent, with earnings ranging from $3.13 to $3.17 per share. It previously forecast profit growth of between 5 and 6 percent, with earnings ranging from $3.06 to $3.10 per share.
For 2002, Verizon expects earnings growth of about 12 percent, with earnings ranging from $3.49 to $3.54 per share. It previously targeted growth of 11.5 to 12 percent, with earnings of $3.41 to $3.46 per share.
As part of the regulatory approval for the merger of Bell Atlantic and GTE, Verizon had agreed to expand beyond its core East Coast territory. The NorthPoint deal would have helped satisfy that commitment. Now, Verizon said it plans to meet that commitment through various means, including its acquisition of OnePoint Communications Corp. and its relationship with Metromedia Fiber Network Inc.
