Qwest Communication reported fourth-quarter earnings today that beat Wall Street estimates after one-time losses as more customers for Internet and bundled packages offset continued declines in access lines.
Chief Executive Officer Dick Notebaert reiterated his earlier hope that Qwest, one of the nation’s largest local phone companies, could return to profit this fiscal year.
Qwest Communications International Inc. stock moved up 10 cents, or 1.7 percent, to $6 a share on the New York Stock Exchange.
For the quarter that ended Dec. 31, Qwest reported a net loss of $528 million, or 28 cents per share, compared with a net loss of $139 million, or 8 cents per share, a year earlier.
The most recent results included a one-time loss of $520 million for debt reduction, restructuring, realignment and severance-related costs. The 2004 fourth quarter had a $59 million one-time loss attributed to restructuring costs. Excluding the loss, Qwest’s would have had break-even results.
Revenue increased 1.3 percent from $3.44 billion to $3.48 billion which included $15 million in revenue from a government contract.
Analysts polled by Thomson Financial expected a loss of 5 cents per share on $3.49 billion in revenue.
“We expect a positive reaction to 4Q results in Qwest shares today and anticipate ’06 numbers across the Street will be moving up on the back of today’s results,” telecommunications analyst David Barden of Banc of America Securities told clients in a research note.
For the full year, the company’s loss narrowed to $779 million, or 42 cents per share, from $1.79 billion, or $1 per share, in the prior year. Revenue increased to $13.9 billion from $13.8 billion.
Overall access lines declined 5 percent while high-speed Internet subscribers were up 42.7 percent in the fourth quarter.
Bundled packages which offer a variety of services also increased, the company said.
During a conference call with analysts, Notebaert said the company has the opportunity to improve market penetration of its growth products and improve the average revenue earned per customer.
“Our progress and our performance continue to demonstrate that our strategies are working and our intentions are to carry that momentum into 2006,” he said. “Qwest may have lagged the industry in developing and investing in these growth products, but we’re catching up.” The Denver-based Qwest is the primary local phone service provider in 14 Midwestern and Western states.
