On Tuesday, Verizon posted its fourth-quarter 2012 earnings, and its profit margin (based on earnings before interest, taxes, depreciation and amortization, or EBITDA) on the wireless side of the firm fell from 42.2 percent to 41.4 percent year over year. The stock is off slightly on the day—as of this writing Verizon (VZ) is hovering around $42.86 per share.
Analysts attribute the downturn to subsidies on handsets (particularly iPhones); rival T-Mobile said it would eliminate such deals in December 2012.
"Handset subsidies on the wireless side [are] clearly a major issue for them," Stifel Nicolaus analyst Christopher King, who expected a margin of 42 percent, told Reuters. "They came in at the low end of people's expectations."