There were no real surprises in Verizon's (VZ - Free Verizon Stock Report) fourth-quarter earnings release, as the diversified telecom reported results that were in line with our expectations. Indeed, revenues declined around 3%, to $26.4 billion in the term, matching our estimate, while share earnings were flat at $0.54 (we were calling for $0.55). Part of this top-line setback can be credited to earlier sales of landline networks. The earnings number, meantime, excludes one-time per-share gains of $0.39 from adjustments related to the company's accounting for pensions and retiree healthcare.

All in all, the wireless division continues to be the primary driver behind Verizon's recent performance. In the fourth quarter alone, the carrier added 872,000 subscribers, well above the Street's expectations of 650,000 new contract-based wireless plans. These contracts tend to be more profitable, and Verizon indicated that the bulk of this new customer base purchased smartphones, which typically include additional data-related expenses.

This comes in the weeks preceding Verizon's long-awaited iPhone debut. The company recently confirmed that it would begin to sell Apple's popular device on February 10th. Already the company has benefited from Apple's iPad, which it began selling in November. Together with the sale of Samsung's competing device, Verizon sold 86,000 tablets in the December quarter. Still, the buzz surrounding the Verizon iPhone continues to grow, and there is talk that the company may well sell more than 10 million devices in 2011.
As for Verizon's remaining businesses, the picture is much less exciting. It continues to add FiOS Internet and television subscribers, but the landline telephone division is fading.

In sum, this appears to be a decent showing for Verizon, and investors seem somewhat pleased, as the stock initially traded a touch higher on the news. Over the longer haul, patient investors may find the issue of interest. In addition to the solid appreciation potential it offers out to 2013-2015, this stock has an attractive dividend yield and holds our Highest rank (1) for Safety, enticing more-conservative, income-oriented accounts.

About The Company: Verizon Communications was created by the merger of Bell Atlantic and GTE in June of 2000. It is a diversified telecom company with a network that covers a population of about 290 million and provides service to nearly 91.2 million. In the last few years, has acquired MCI (1/06) and Alltel (1/09). The company is also the largest provider of print and on-line directory information. Has a wireline presence in 28 states & Washington, D.C. and a wireless presence in every U.S. state & D.C., as well as operations in 19 countries.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.