Qwest’s financial results for the third quarter beat analyst estimates, though the company posted a quarterly net loss for the first time in nearly five years after factoring in one-time charges.
Excluding those charges, the Denver-based company, which is merging with CenturyLink, reported earnings of 11 cents a share on revenue of $2.9 billion. Wall Street analysts polled by Thomson Reuters expected earnings of 10 cents a share. Analysts generally focus on operating results, which don’t include one-time charges, because it better reflects financial performance.
Operating expenses dropped 5 percent to $2.4 billion as Qwest trimmed marketing and cut nearly 700 jobs during the quarter. The company now employs 28,535.
After experiencing slower broadband growth in the second quarter with 7,000 net additions, the company rebounded by posting 40,000 net additions to its high-speed Internet service in the third quarter.
Including one-time charges of $300 million, Qwest posted a net loss of $90 million, or 5 cents a share. The bulk of the charges were related to debt conversion. The company also recorded one-time fees related to the pending merger and severance and realignment.
Qwest recorded net income of $136 million, or 8 cents a share, during the third quarter of 2009, which included one-time charges of $27 million.
Qwest last posted a quarterly loss in the fourth quarter of 2005, just before a string of profits under former chief executive Dick Notebaert, who turned the company around with cost cuts and broadband growth.
CenturyLink announced plans to acquire Qwest in April for $22 billion in stock and assumed debt. The combined company will be based at CenturyLink’s headquarters in Monroe, La. The merger is expected to close during the first half of 2011.
Andy Vuong: 303-954-1209, avuong@denverpost.com or
