Qwest today reported its third straight quarterly profit as cost cutting and growth in its high-speed Internet business helped offset a larger-than-expected decline in wireline customers.
The Denver-based phone company posted a third-quarter net profit of $194 million, or 9 cents per share, compared with a loss of $144 million, or 8 cents per share, during the same period a year ago.
Revenue stayed relatively flat at $3.49 billion, which was in line with analyst expectations, according to Thomson Financial.
Analysts expressed concern about Qwest s 6 percent drop in total access lines compared with a 5.3 percent drop in the second quarter.
The quarter started to show the increasing impact of competition, both on the consumer side and on the business side, said Donna Jaegers, a telecom analyst with Janco Partners in Denver.
Cable companies such as Comcast have aggressively marketed bundled offerings that include video, Internet and phone services, to lure customers away from the telcos.
Qwest s stock took a beating this morning shortly after earnings were announced, dropping as much as 4 percent in midday trading.
Sometimes, you have to find something to improve, said Qwest chief executive and chairman Richard Notebaert. We did have access line loss, and that comes about from wireless competition and from cable. I don t know why anybody would ve been surprised.
To compete against the cable companies triple-play offering, Qwest has aggressively marketed its own bundle of services.
The company s digital subscriber line, or DSL, high-speed Internet continues to grow. Qwest added more than 175,000 high-speed Internet lines in the third quarter, a 10 percent increase sequentially and a 47 percent increase year-over-year in total subscribers. The company now has more than 2 million DSL customers.
Again, we had a very good quarter, Notebaert said.
