Q. Please assess the potential of Verizon Communications Inc. stock. I am a longtime shareholder. — B.N., via the Internet

A. The telephone giant will cut more than 8,000 employee and contractor jobs in its landline business by year-end as consumers continue to switch to cell phones.

That landline operation serving nearly one-third of the US population has also been hurt by companies around the country curtailing telecommunication expenditures and reducing their employee rolls.

The firm, which also owns 55 percent of Verizon Wireless in a partnership with Vodafone Group, increased its wireless customer base with the acquisition of Alltel in January. Verizon ranks No. 1 in US wireless customers with 87.7 million versus AT&T's 79.6 million.

While Verizon added 1.1 million subscribers in the second quarter, that gain lagged behind AT&T, which offered the wildly popular iPhone. Verizon's offering of Palm Inc.'s new Pre smartphone in early 2010 and upcoming phones from Motorola Inc. is being counted upon to provide a boost to future cell phone prospects.

Verizon (VZ) stock is down four percent this year, following last year's 18 percent decline. Earnings fell 21 percent in its second quarter, and the lacklustre conditions are not expected to improve the rest of this year.

Still, the company is moving ahead aggressively.

Verizon Wireless and chipmaker Qualcomm Inc. formed a joint venture to offer machine-to-machine wireless service in 2010. Such service allows use of devices besides phones and could, for example, permit a company to monitor individual homes without having to visit them.

It also recently made a deal in which the new movie channel Epix will be carried by Verizon's FiOS TV service. Epix previously had a deal with CBS' Showtime to air its films exclusively for a set period after they came out in theaters.

Consensus analyst rating of stock of Verizon is "buy," according to Thomson Reuters, consisting of seven "strong buys," nine "buys," 12 "holds" and one "sell."

Among the concerns, Verizon must spend enormous amounts of money to upgrade its landline network and expand its wireless operation. The Alltel purchase was also costly and integration of the two companies isn't going to be easy.

Earnings are expected to decline a fraction this year compared with the 22 percent gain forecast for the domestic telecommunication services industry. Next year's projected increase is five percent versus the seven percent predicted for its peers. The expected five-year annualized growth rate of 5 percent is in line with the industry.

Q. I cannot believe how poorly Legg Mason Growth Trust has done. Is there hope? — P.K., via the Internet

A. You hit the nail on the head: This has been one of the very worst-performing funds.

With only 34 stock names in its portfolio, mistakes in judgment such as it made in a few financial stocks can take a serious toll on results. Originally based on the Warren Buffett strategy of buying growth stocks at discount prices and holding for the long haul, it hasn't done much positive with that concept lately.

The $344 million Legg Mason Growth Trust (LMGTX) is down 38 percent over the past 12 months and has a three-year annualised return of 14 percent. Both results rank in the bottom two percent of all large growth funds.

"We're 'iffy' on this fund because, while the Legg Mason funds had a nice run in the 1990s and early part of this decade, we've since seen weakness," said Bridget Hughes, analyst with Morningstar Inc. in Chicago.

"After all this volatility it can't be recommended as a core holding, so we're in limbo on it for now until we see what it can do after such horrific performance."

Industrial materials represent 15 percent of the portfolio, with telecommunications, technology hardware, health care and consumer services other concentrations. Top holdings were recently Microsoft, Cisco Systems, EMC, PepsiCo, Allergan, CVS Caremark, Qualcomm, Amazon.com, Google and Transocean.

Robert Hagstrom, who has between $500,000 and $1 million of his own money invested in Legg Mason Growth Trust, has been in charge of the fund since the 1995 inception.