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Verizon Communications ( VZ ) is starting to feel the pain from the ongoing strike by nearly 40,000 wireline workers, according to Wells Fargo, which on Friday lowered its Q2 and full-year profit-margin and revenue estimates for the telecom giant. Two unions representing about 39,000 Verizon landline workers, including those that work on its FiOS TV and broadband services, went on strike April 13. Verizon’s wireless workers, however, are not unionized, except for roughly 100 employees. Verizon has a total workforce of nearly 178,000. “While the striking employees are almost all wireline workers, we believe the strike has become a distraction to its wireless operations. VZ has been less promotional with its wireless offerings in Q2, and recent checks have shown some unfavorable (customer-switching) trends,” Wells Fargo analyst Jennifer Fritzsche said in a research report. Verizon and the two unions — the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) — have reopened talks, with a federal mediator involved. “While a federal mediator has the two sides back at the bargaining table, a near-term resolution is still unclear,” Fritzsche wrote. “Management recently indicated that install and order activity for FiOS has ‘significantly dropped’ as employees have been primarily focused on repair and maintenance. “Accordingly, we are cutting our Q2 and 2016 wireline revenue estimates by $343 million and $826 million. We are also lowering our Q2 and 2016 wireline margin estimates.” Verizon stock rose 3 cents to 49.66 in the stock market today , and it’s mostly been trading below the key 50-day line since touching a 16-year high of 54.49 on April 5. Verizon is widely regarded as the front-runner to acquire Web portal Yahoo ( YHOO ). Scalper1 News
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