Qwest's Earnings Soar on Tax Gain
WASHINGTON (Dow Jones) -- Qwest Communications International on Tuesday posted a massive $2 billion profit in the third quarter, largely owing to a onetime tax gain.
Denver-based Qwest said net income rose to $2.07 billion, or $1.08 a share, from $194 million, or 9 cents a share, a year earlier. Results included a tax benefit of $2.15 billion and onetime costs of $353 million related to shareholder litigation.
Revenue fell slightly to $3.43 billion from $3.49 billion, which Qwest blamed on weakness in its less-profitable wholesale business.
The company did not include per-share profit figure adjusted for the onetime items. On that basis, analysts polled by Thomson Financial were expecting Qwest to earn 15 cents a share on $3.49 billion in sales.
Because it doesn't own a wireless network - the fastest growing part of the communications industry - Qwest has relied on cost cuts and the sale of more data and Internet services to counter a steady decline in the number of local-phone subscribers.
Operating expenses, adjusted for litigation costs, fell 6% from a year earlier.
Qwest also added 111,000 high-speed Internet subscribers to raise its total to 2.52 million.
The latest quarterly report is the first since Chief Executive Edward Mueller took over for Richard Notebaert, who nursed Qwest back to health after a near-brush with bankruptcy several years ago.
The 59-year-old Notebaert, a longtime executive in the communications industry, retired in August after five years at the helm.
Some investors hope Qwest will announce a share buyback or plans to reinstate a dividend as a means to reward stockholders. Others are looking for information on how Mueller plans to boost growth.
On Monday, shares of Qwest fell 8 cents to $8.18.
Â(END) Dow Jones Newswires
Posted to the site on 30th October 2007
