Qwest's Q2 profit falls 26%
DENVER (AP) – Qwest Communications International, which has agreed to be acquired by a smaller phone company, on Wednesday said its second-quarter earnings fell 26 percent as customers continued to cancel landlines, and it signed up few new broadband customers.
Qwest, the country's third-largest local phone company by the number of lines, reported net income of $158 million, or 9 cents per share, in the April-June period, down from $212 million, or 12 cents per share, a year earlier.
The latest results included a net charge of 1 cent per share. Excluding that item, earnings would have been 10 cents per share, beating the 9-cents-per-share average estimate of analysts polled by Thomson Reuters.
Revenue fell 5.2 percent to $2.93 billion, from $3.09 billion a year ago, but still topped analysts' $2.92 billion forecast.
In addition to landline cancellations, the end of a deal to resell Sprint Nextel Corp.'s wireless service reduced revenue by one percentage point compared with last year. Qwest now markets Verizon Wireless' service but doesn't book the subscriber fees as revenue.
Qwest, which is based in Denver, added a net of just 7,000 broadband customers. It lost regular DSL lines but gained some where it has upgraded the network to offer higher speeds and compete more effectively with cable. A year ago, it added 42,000 broadband customers.
In April, Qwest announced a deal to be acquired by CenturyLink for stock now worth about $10.5 billion. Shareholders are set to vote on the deal on Aug. 24, and it's expected to close in the first half of next year after approval from the states where the companies provide local phone service.