Qwest Communications reported net income of $151 million in its third quarter of 2008, compared with a net income of $2.1 billion in the same period of 2007.
Qwest said that it will cut about 1,200 jobs (about 3 percent of its workforce) during the fourth quarter due to the 93 percent decline in earnings during its third quarter. Currently, Qwest is negotiating with its largest labor union to approve a new contract.
The Q3 2007 net income results included a one-time tax benefit of $2.1 billion and a $353 million charge for legal matters, and the current quarter net income includes a charge of $63 million for severance and a lease restructuring benefit of $33 million, the company said.
For the quarter, Qwest reported total revenues of $3.4 billion, a decline of 2 percent year-over-year but flat with the second quarter of 2008.
"In the quarter, our financial results were again mixed," said Edward A. Mueller, Qwest's chairman and CEO. “We are pleased with the rebound in broadband sales in the quarter, and our Business Markets reported a strong top-line. We also produced solid free cash flow. However, our margins were impacted by fewer consumer access lines and a less-profitable revenue mix. Reflecting our cautious outlook on the near-term direction of the economy, we have taken a number of steps to keep our costs aligned with customer demand and maintain maximum financial strength and flexibility."
Qwest added 61,000 high-speed Internet customers in the quarter, and its fiber-to-the-node (FTTN) build-out now reaches more than 1.5 million potential customers. Qwest expects to reach 1.8 million potential customers by year’s end.
Video subscribers (via DirecTV) increased by 39,000 in the quarter, giving Qwest a total of 761,000 video subscribers. And wireless subscribers decreased by 45,000 in the third quarter, due in part to migration efforts, the company said.
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