Qwest’s net income for the second quarter declined 26 percent as the Denver-based company continued to lose phone customers at a double-digit clip.
The company today reported a profit of $158 million, down from $212 million during the same quarter a year ago. Revenue fell to $2.9 billion from $3.1 billion.
Second-quarter net income included one-time charges of $8 million for severance and realignment and $27 million for expenses connected to Qwest’s proposed merger with Monroe, La.-based rural phone operator CenturyLink. It also included a one-time debt conversion gain of $21 million.
Total access lines dropped 11 percent to 9.4 million. Customers continue to cut the cord on traditional land lines, replacing them with cell phones or Internet-based service.
Despite the ongoing land-line decline, Qwest has been able to post profits through cost cuts and high-speed Internet growth. Total residential broadband customers grew 4 percent to 2.9 million in the second quarter. Qwest said its faster, fiber-to-the-node Internet service is now available to 4 million households. In the quarter, 52,000 customers added fiber-to-the-node services, taking total users to more than 500,000.
Qwest shed 2,300 jobs over the past year, taking its workforce to 29,221 at the end of the second quarter.
More job cuts are expected after the company completes its $22 billion deal with CenturyLink, expected to close during the first half of 2011. The combined company will be based in Monroe.
“We are very pleased with the progress of our planned merger with CenturyLink,” Qwest chief executive Ed Mueller said in a prepared statement. “The integration planning is well under way, and we are achieving key approval milestones.”
Qwest said last Month that the Federal Trade Commission and the U.S. Department of Justice have granted antitrust approval. The deal still requires approval from the Federal Communications Commission and state regulators.
Separately, CenturyLink reported Wednesday that its net income rose 219 percent $265.7 million in second quarter from $83.3 million a year ago, largely driven by the company’s acquisition of rural phone operator Embarq. That deal closed in July 2009.
CenturyLink’s net income excluded one-time charges of $27 million.
The company posted revenue of $1.8 billion, up from $635 million in second quarter 2009. Embarq added $1.2 billion to the revenue figure, CenturyLink said.
Andy Vuong: 303-954-1209, avuong@denverpost.com or
