Amid a resurgent stock market during the first quarter, Colorado’s long-struggling telecommunications sector is on the upswing – at least as measured by share price.
Level 3 Communications and Time Warner Telecom are among the state’s top performing public companies as the quarter comes to a close today. Qwest was also up.
“Telecommunications is back,” said Fred Taylor, money manager with Northstar Investment Advisors in Denver. “It was one of the best performers of the S&P 500.”
Through Thursday, the S&P 500 was up 4.1 percent, the technology-laden Nasdaq was up 6.1 percent and the blue-chip Dow Jones industrial average was up 4.0 percent.
Overall, stock prices for 80 of Colorado’s 114 publicly traded companies were up for the quarter through Thursday. The Bloomberg Colorado Index was up 9.5 percent.
The Nasdaq telecom composite, a nationwide basket of 190 telecommunications stocks, was up 23.4 percent for the quarter.
Yet the stocks of Broomfield-based Level 3 Communications and Time Warner Telecom of Douglas County – which are part of the Nasdaq telecom composite – were each up more than 75 percent.
Denver-based Qwest, which trades on the New York Stock Exchange, was up nearly 21 percent for the quarter through Thursday.
Several factors drove the increase, including industrywide consolidation that could portend additional deals, sizzling sales of wireless phones and accessories and fresh revenue from Internet telephone service, analysts said.
The rebound of Colorado’s telecom sector from the dark days of 2002-03 may be good news.
But it hasn’t yet translated into additional jobs, said Holli Baumunk, vice president of the Metro Denver Economic Development Corp.
“We have the talent that these companies need, so as they grow, they can hire back workers,” said Baumunk.
Telecom has been one of Denver’s largest industries, employing 56,000 people as of 2003 – the latest available data. Those jobs paid an average of $74,000 per year, Baumunk said.
Here’s the quarterly performance through Thursday of the three telecoms:
Level 3 – with a market capitalization of $4.2 billion – ranked No. 3 among the state’s top performing companies. It posted a 79.4 percent increase for the quarter, boosted by strong demand for broadband webcasts and Internet-based phone service.
Time Warner Telecom – with a market capitalization of $2.07 billion – came in at No. 5, up 77.7 percent for the quarter, fueled by additional Internet and data revenue.
Qwest Communications, the 14-state telephone and Internet provider with a market capitalization of $12.7 billion, came in at No. 31, up 21 percent. Industrywide consolidation – and speculation that Qwest might be an acquisition target – helped drive the stock higher. The company’s improving balance sheet was another factor.
Mining company Apollo Gold Co. delivered the best return among Colorado public companies for the quarter – a 212.5 percent gain.
And Greenwood Village-based HyperSpace Communications, a software maker, was the state’s worst performer, declining by 34.9 percent.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com
