Jan. 21 - Concerns about rising competition overshadowed Verizon's strong quarter and a deal to buy Intel's OnCue TV project. Bobbi Rebell reports.
Verizon Communications delivered hearty results- but got the cold shoulder from investors. The telecomm giant said its subscriber growth is growing faster than expected- and its profits beat forecasts on strong mobile growth. But the stock took a step back- a reality check that investors fear the good times could soon fade- because of ramped up competition: S&P Capital IQ's Jim Moorman has a neutral on the stock. SOUNDBITE: JIM MOORMAN, EQUITY ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING: "I think one of the concerns is Verizon hasn't really - they have done some promotions in the 4th quarter, but they haven't really been aggressive. They haven't responded as much as say AT&T and some of the other carriers have, and I think that could be one of the concerns going forward is that while they haven't acted, they have been very disciplined kind of standing by the sidelines and they haven't really been impacted but when they started getting into the fray too, I think that is what has people concerned." Verizon did just start offering a new lower-end $60 share everything plan - that's $20 cheaper than the current plan. Number 2 telecomm AT&T and No. 4 ranked T-Mobile U.S. have been directly targeting each other's customers in ads- and No. 3 service provider Sprint is offering new discounts as well. Moorman did like Verizon's decision to buy Intel's Cloud TV project- OnCue- saying it's a win for their FiOs video business. SOUNDBITE: JIM MOORMAN, EQUITY ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING: "I think they want to continue to do what they are doing to battle the cable companies and to get into IPtv where they have already been in it to expand their offerings. I think it helps. It offers a more attractive offering for them. I think it also helps reduce their costs over time. So I think it's a good move. It's not a huge acquisition but it is in terms of what they want to do with FiOs going forward and to continue to grow the FiOs brands. It's one of their growth areas especially on the wireline side." Verizon can leverage its already established relationships with video content providers, delivery networks and customers.