Three Denver-based companies reported strong first-quarter profits Tuesday, continuing an impressive run of earnings growth and rising share prices.
Qwest, the phone company serving 14 states, had a profit of $240 million, or 12 cents a share.
ProLogis, the world’s largest owner, manager and developer of distribution facilities, posted net earnings of $236 million, or 89 cents a share.
Chipotle Mexican Grill, which opened 28 new restaurants during the quarter, recorded a profit of $12.4 million, or 38 cents a share.
In delivering on earnings expectations, the trio reaffirmed the investor confidence that has kept the Bloomberg Colorado Index of state-based public companies at record highs over the past month. The index closed Tuesday at 420.23, down 0.03.
Qwest and Chipotle, in particular, have attracted attention from investors switching to media and growth stocks amid a slowing in earnings growth for companies in other industries.
Qwest beat first-quarter profit forecasts by 3 cents a share even though its revenue declined slightly to $3.45 billion from $3.48 billion. Twenty-one analysts polled by Thomson Financial expected Qwest to earn 9 cents a share.
The company was able to grow its profit by almost three times, largely because of cost cuts. Qwest posted net income of $88 million, or 5 cents a share, during the first quarter of 2006.
Operating expenses dropped 6.2 percent to $2.9 billion, which included a $40 million charge related to securities litigation. The company didn’t provide specifics about that charge.
It still faces several shareholder lawsuits and is advancing legal fees for former chief executive Joe Nacchio, who was convicted of illegal insider trading last month and plans to appeal.
Qwest’s workforce has shrunk along with its costs. As of March 31, the company had 38,011 employees, down from 39,127 at the same time a year ago. The company also cut some costs in January by capping life-insurance benefits for retirees.
“I think it was a solid performance,” Qwest chief executive Dick Notebaert said in an interview. “We were able to do what we said we would do.”
The company has posted five straight quarterly profits.
Growth in Internet and video subscribers continues to help the company offset losses in traditional landline customers. The company added 167,000 high- speed Internet customers during the quarter. It had a net gain of 80,000 customers to its satellite-TV service, which Qwest resells through a partnership with DirecTV.
Meanwhile, the company’s total access lines dropped 6.8 percent to 13.55 million amid intense competition for phone customers from cable and Internet phone companies.
“Overall, we think results looked good,” JP Morgan analyst Jonathan Chaplin wrote in a research note Tuesday.
Qwest’s revenue, however, missed Chaplin’s target of $3.5 billion. The company ended the quarter with $14.9 billion in debt and $1.1 billion in cash and short-term investments.
Qwest stock closed Tuesday at $9.11 a share, up 23 cents. That matched a 52-week high closing price for the stock.
ProLogis reported first-quarter funds from operations of $1.25 a share, up 38.9 percent from 90 cents in the same period last year.
Net earnings for the first quarter were 89 cents a share, compared with 72 cents in the same period a year ago.
The strong results reflect growth in international trade, driving demand for modern, well-located logistics facilities at key transportation nodes, the company said.
During the quarter, the company increased its European operations with the acquisition of Parkridge’s industrial business and a 25 percent investment in its retail business for $1.3 billion.
It also started construction of $615.6 million of new development and completed $515 million. ProLogis stock closed Tuesday at $65.13, up 33 cents.
Chipotle’s net earnings grew 46.2 percent to 38 cents a share from 26 cents a share during the same quarter a year ago.
Revenue increased to $236.1 million from $187 million. This growth in revenue was attributable to new restaurants and an 8.3 percent increase in comparable restaurant sales, the company said.
Operating margins increased to 20.7 percent from 20.2 percent, primarily due to higher average restaurant sales, menu price increases associated with the addition of naturally raised meats in certain markets and efficiencies in labor.
“Our strong first-quarter comparable restaurant-sales increase, along with restaurant-level margin expansion continue to demonstrate our ability to build customer loyalty while improving restaurant-level profitability,” Chipotle chief finance and development officer Jack Hartung said in a statement.
Chipotle stock closed at $66.26 a share, up $1.03.
