American telecommunications giant Verizon Communications have announced a substantial drop in profits despite a boost in customers to sister company Verizon Wireless.
Verizon Communications reported earnings of $6.2 billion (£3.15 billion) compared with $7.4 billion (£3.7 billion) in 2005. However the fourth quarter of 2006 saw Verizon Wireless add 2.3 million net customers to reach a total of 59.1 million customers across the US. This was the second time in the company's history that quarterly net customer additions exceeded the 2 million mark.
However Verizon Communications pointed towards the sale of the company's operations in the Dominican Republic as a large part of the problem. The company was charged $541 million (£ 275 million) in taxes "on reinvested earnings net of a pre-tax gain on the sale".
Chairman and chief executive officer of the company Ivan Seidenberg said: "We had a strong 2006 both operationally and financially. We enter 2007 well-positioned to continue to gain momentum."
Commenting on the past year which saw the company acquire telecommunications group MCI, Mr Seidenberg said: "We have strengthened our balance sheet, in part through strategic transactions that have created shareholder value, and we have assembled the right team to deliver the communications, data and entertainment services that customers want."
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