Verizon reported a quarterly loss of $4.23 billion, or $1.48 per share, up from losses of $2.02 billion, or 71 cents per share a year earlier, in part because of losses and damages related to Hurricane Sandy. While the company added wireless customers during that period, because of massive damage to its communications hubs in downtown Manhattan it ended up losing more money. Although Verizon had prepared for a disaster like Sandy after the 9/11 attacks, moving some equipment to more secure locations than the basement, the extent of the flooding still knocked out entire buildings worth of equipment, part of which you can see in the Reuters photo below:
On top of the repairs, Verizon also waived texting and talking fees from Oct. 29 through Nov. 16 for customers in the New York and New Jersey area during Sandy, as a courtesy. It took over two weeks for the carrier to get "pretty much back to normal." The company also donated over $1 million to the Red Cross for Sandy relief.
These investments in Sandy, however, will pay off in the long-term. The damage has prompted the company to replace its old copper wires with fiber optic cables, so it can sell more of those lucrative FiOs accounts. On its earnings call this morning, the carrier said FiOS service represents more than two-thirds of customer revenue. And at this point, Verizon only offers its super-speed Internet in limited locations. These Sandy induced upgrades will ensure an instand increase in that customer revenue. In the past, when the company has offered this faster cable option, most people not only convert, but upgrade to some sort of double-play package, Verizon CEO Lowell McAdam has before said. Plus, installing fiber optics costs less than repairing the old stuff. This quarter's loss will soon be next quarter's gain.