Qwest posted its sixth-straight quarterly profit in the second quarter but missed analyst estimates. The Denver-based communications company continues to offset declines in phone customers with cost-cuts and growth in high-speed Internet subscribers.
The company announced today second-quarter net income of $246 million, or 13 cents a share, compared with $117 million, or 6 cents a share, during the same quarter a year ago.
It posted revenue of $3.46 billion, down slightly from $3.47 billion a year ago.
Analysts polled by Reuters expected the company to post earnings of 14 cents a share on revenue of $3.475 billion.
Qwest stock dropped about 2.5 percent in early trading today after the company announced financial results, falling 21 cents to $8.32.
The company, which is halfway done with its previously announced $2 billion share buyback, is considering rewarding shareholders again, possibly with a cash dividend.
“The board is well on its way in reviewing it,” Qwest chief executive Dick Notebaert said during an analyst conference call, possibly his last with the company. “I would not anticipate there would be delay in the board’s decision.”
Notebaert said in June that he will retire as soon as the board of directors finds a successor.
“My expectation is that will happen sooner rather than later,” Notebaert said.
The company has said it hopes to make an announcement on the new CEO by the end of September.
Qwest continues to suffer declines in landline customers. The company’s total access lines declined 7.1 percent and residential lines dropped 6.9 percent.
The company added 100,000 subscribers to its broadband Internet service. Qwest also cut its operating costs by 4.2 percent. Included in that was a $24 million reduction in facility costs.
“We will continue to bring that facility cost down,” Notebaert said.
The company’s average revenue per customer increased 8 percent to $53 from $49 a year ago.
Qwest ended the quarter with $869 million in cash and short-term investments. The company said it is on target to generate free cash flow of $1.8 billion for the year.
Qwest, which offers local phone service in 14 states and operates a nationwide fiber-optic communications network, employs 38,000, including about 9,000 in Colorado.
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
