Qwest Posts $307 Million Loss in Fourth Quarter

The carrier blames increased competition from wireless and local phone service for the loss.
DENVER (AP) -- Qwest Communications International Inc. reported a fourth-quarter loss of $307 million on Thursday, blaming competition from wireless and local phone-service providers.

The loss, which amounts to 17 cents per share, contrasts with a profit of $2.7 billion, or $1.61 per share, in the last three months of 2002, when the sale of Qwest's phone directory unit boosted results.

Revenue was $3.5 billion, down 5.6 percent from $3.7 billion in the same quarter in 2002.

Analysts surveyed by Thomson First Call had expected a loss of 8 cents per share before charges. Qwest did not indicate whether its fourth-quarter results included special charges.

In an analyst note, John Hodulik of UBS wrote that Qwest's results were "weaker than expected across the board." Janco Partners Inc. analyst Thomas Friedberg said Qwest missed his revenue estimates, but that the company was doing the best it could.

"The results show Qwest competes in a very tough environment. They're not in an easy market," Friedberg said.

The telecommunications company said it sees opportunities for growth.

"The fourth quarter was an important turning point for the company, both operationally and financially," chief financial officer Oren Shaffer said.

Sales of high-speed DSL Internet access and long-distance within Qwest's 14-state region are growing, and Qwest has momentum, CEO Richard Notebaert said.

The company plans to spend $200 million in 2004 to make DSL available to more than 60 percent of its total access lines, or roughly 6 million homes, Notebaert said. It is available on 45 percent of lines now.

On Feb. 28, Qwest will begin offering DSL to customers, even if they don't have a land line for phone service from Qwest.

Qwest, which resumed selling long-distance service in its 14-state region last year, said it ended the quarter with 2.3 million long-distance customers, up 36 percent in the quarter.

Notebaert said Qwest has doubled the number of subscribers it adds each day since mid-December, when it launched its Qwest Choice bundle of phone and Internet services.

Qwest has been selling Internet calling, or Voice over Internet Protocol services, in the Minneapolis area and hopes to offer it in all major metropolitan markets in its 14 state region by the end of the year.

For all of 2003, Qwest recorded a profit of $1.6 billion, or 93 cents per share, versus a loss of $38.5 billion, or $22.87 per share, in 2002. Full-year revenue was $14.3 billion, down from $15.4 billion in 2002.

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