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Qwest rebuts Morgan Stanley report

Wed, 06/20/2001 - 8:00pm
Anne Kerven

Smarting from a Morgan Stanley analyst report that reduced its stock from "outperform" to "neutral," Qwest Communications International issued a strongly worded rebuttal.

The MS report questioned Qwest's accounting decisions and suggested those could end up causing slower growth than what the company had predicted.

Among other concerns, analysts reportedly suggested they could trace up to 28 cents a share to accounting moves, not business growth, in 2000; upped the returns expected on its pension plan assets; and did not report an estimated $3.1 billion asset writeoff.

The report "addresses several technical issues relating to the manner in which Qwest has accounted for its acquisition of US West on June 30, 2000," Qwest says in a statement.

It adds the report doesn't cover anything Qwest hasn't previously disclosed, it uses innuendo, and that its conclusions about Qwest's accounting practices are wrong.

The company announced Tuesday that it was "comfortable" with its previously announced guidance, with an estimated 2001 revenue of about $21.3 billion to $21.7 billion and EBITDA of $8.5 billion to $8.7 billion.

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