Qwest reported today that its first-quarter net income fell 35 percent on sharply higher tax expenses.
The Denver-based telecommunications company earned $157 million, or 9 cents a share, in the three months that ended March 31, down from $240 million, or 12 cents a share, in the same quarter a year ago.
Its tax expenses rose to $99 million from $2 million a year earlier as Qwest began recording income-tax expense at normal effective rates.
Analysts surveyed by Thomson Financial estimated, on average, profit of 10 cents a share on sales of $3.41 billion.
Shares of Qwest fell more than 5.7 percent, or 31 cents to $5.05 a share in early trading.
Overall revenue fell 1.5 percent to $3.4 billion from $3.45 billion in 2007, which the company said was due to increased competition in the long-distance business and industry consolidation.
Revenue for data, Internet and video products increased 9 percent and represented nearly 40 percent of overall sales, said chairman and chief executive Ed Mueller during a conference call this morning.
“These growth products are an increasingly significant portion of our business and will help drive our growth as the industry shifts from legacy to next-generation products and services,” he said.
Qwest reported 90,000 new Internet subscribers, including 13,000 customers signing up for the company’s new fiber-to-the-node service, which offers faster speeds. Those increases helped offset an 8.3 percent decline in landline service.
The company expects higher profit margins from its partnership with Verizon Wireless, which it announced Monday. Mueller said Verizon’s 4G services would be attractive to Qwest customers.
The company also added 50,000 DirecTV satellite service customers.
Read more in Wednesday’s Denver Post.
The Associated Press contributed to this report.
