Verizon shares slump as 45,000 workers strike
NEW YORK (Reuters) - Shares of Verizon Communications <VZ.N> were down 2.1 percent in early trading on Monday, a day after nearly half of its wireline business employees went on strike.
The shares were faring slightly better than the broader market, with the baseline S&P 500 index down 2.2 percent.
The roughly 45,000 workers on strike are part of Verizon's U.S. Northeast wireline unit, which provides traditional phone services as well as high-speed Internet and FiOS television services.
Verizon is looking to keep costs in check at the wireline business, which has been declining for a decade as customers have disconnected their home phones in favor of cellphone and Internet services.
The unions -- the Communications Workers of America and the International Brotherhood of Electrical Workers -- have rejected Verizon's proposals to cut pensions, change work rules and make employees pay more for healthcare.
The sides have been in contract talks since late June, with the unions accusing Verizon of being unwilling to negotiate and setting the scene for the possibility of an extended work stoppage.
Richard Young, a spokesman for Verizon, said the company was negotiating with the unions on Monday. Young said Verizon's last strike lasted 18 days in 2000 and cost the company $40 million.
Chris King, an analyst at Stifel Nicolaus, said in a research note on Monday that this strike would not be as costly since the company's wireline business has shrunk since 2000.
King estimated the daily costs of the strike would be between $1 million and $2 million.
"The wireline business is something that Verizon is less exposed to than they have ever been in the past," King said in an interview. "They are certainly more comfortable dealing with the strike today than they were 10 years or so ago."
King, who has a "buy" rating on Verizon, said he sees the impact limited to slower-than-usual installations.
(Reporting by Sinead Carew, Roy Strom, Dhanya Skariachan and Nadia Damouni; Editing by Derek Caney)