Verizon CEO says strike may impact second-quarter results

Tue May 24, 2016 2:20pm EDT
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By Malathi Nayak

(Reuters) - Verizon Communications Inc (VZ.N: Quote) Chief Executive Officer Lowell McAdam said on Tuesday the ongoing strike by the No.1 U.S. wireless provider's nearly 40,000 union employees could pressure second-quarter results.

Network technicians and customer service representatives in the company's Fios Internet, telephone and television services units walked off the job on April 13 in one of the largest U.S. strikes in recent years. The action was called by the Communications Workers of America and the International Brotherhood of Electrical Workers.

The wireless and broadband provider has "pushed off" new Fios service installations as a result of the strike, McAdam said at the J.P Morgan Technology, Media and Telecom conference in Boston.

"We're doing a lot of installations but we're not doing the same volume that we had before," Lowell said. "So we won't be driving similar numbers in second quarter that we would in first from an installation perspective."

Union members protested outside the conference venue on Tuesday. The company has brought in managers and thousands of temporary workers aiming to avoid service disruptions.

Verizon's Chief Financial Officer Fran Shammo, speaking at another conference last week, said the company has been focusing on repair and maintenance issues and that new installations and orders had "significantly dropped."

"I would be optimistic if I said we would be net positive for broadband and TV this quarter," Shammo said.

Verizon is expected to report second-quarter results on July 26. In April, it reported first-quarter earnings and said the strike was expected to hurt second-quarter earnings.   Continued...

The entrance to a Verizon wireless store is seen in New York, in this May 12, 2015, file photo.  REUTERS/Shannon Stapleton/Files