Verizon warns strike could hit earnings

Verizon warns strike could hit earnings
© Getty

Verizon said Thursday that a strike by its East Coast workforce could hurt its quarterly earnings.

“Verizon continues to expect full-year 2016 adjusted earnings to be at a level comparable to the company’s strong full-year 2015 adjusted earnings,” the company said in a release coordinated with the announcement of its first quarter earnings.

ADVERTISEMENT
“However, given the status of labor contract negotiations, there will be pressure on second-quarter earnings due to the timing of cost reductions.”

The company’s first-quarter earnings of $4.31 billion met estimates, according to Reuters, while revenue of $32.17 billion fell slightly short of analysts' expectations.

Nearly 40,000 workers, mostly for the company’s wireline business, are on strike after unions and the company failed to find common ground on a new contract after months of negotiations. The workers have been without a contract for months.

The workers argue that Verizon is trying to implement major cuts in a new contract and make it possible for workers to be sent out of state for months of work.  

Verizon has said that the unions want to throw a wrench into the contract negotiations by striking.

Verizon says it has trained non-union employees to step into the roles usually filled by the striking employees. Executives have also said that new technology used for customer service functions may take some pressure off the company during the strike.

A strike in 2011 lasted for two weeks.