Qwest managed to cut costs faster than revenues declined during the third quarter, resulting in better-than-expected earnings.
Qwest on Wednesday reported a 9.7 percent decline in third- quarter revenues to $3.05 billion as competition and a tough economy caused more customers to drop their phone lines.
But the company managed to cut operating costs 12.2 percent compared with the same period a year ago and said it is doing better with delinquencies.
Net income per share was 8 cents in the third quarter, flat with a year ago. Actual net income declined to $136 million, down 6.2 percent from $145 million a year ago.
Qwest reported a loss of nearly 1 million access lines over the past year as tough economic times motivated more people to drop second lines or switch entirely to cellular service.
Qwest gained 28,000 net broadband, 23,000 wireless and 15,000 DirecTV subscribers during the third quarter compared with the second.
Those gains are important, given that Qwest must eventually find a way to replace the revenues it is losing.
“Overall, it is not over,” Qwest chief operating officer Teresa Taylor said of the downturn in Qwest’s region. “It is still rough.”
Over the past year, the company has shed 3,400 jobs or about 10 percent of its workforce, which stands at about 31,300. But the company said it made no major job cuts in the third quarter, and none is planned in the fourth. It also has built up cash reserves to pay down debt coming due next year.
Qwest customers with wireless service through Sprint will be cut off this weekend. About 45,000 customers out of more than 800,000 haven’t switched over to Verizon or lined up another carrier for their number, despite repeated warnings.
“We have more than communicated to them,” Taylor said. “They will get cut off.”
Qwest shares rose 9 cents, or 2.6 percent, to close at $3.54, on a day when the broader market was down.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
