Qwest's Earnings Triple As It Looks Ahead To Networx Government Contract

Gains in Internet and video services, as well as the popularity of bundled offerings, were responsible for the strong performance.
Qwest Communications International, the smallest of the former Bell companies, has posted the largest gains as its first-quarter earnings nearly tripled from last year.

In its financial report, the telecommunications company pointed to gains in Internet and video services, as well as the popularity of its bundled offerings, as measures driving the improved numbers.

Profits in the quarter rose to $240 million -- up from $88 million in the same quarter last year -- while revenue of $3.45 billion hardly changed, down slightly from $3.48 million in 2006.

Qwest differs from its Bell company siblings, AT&T and Verizon Communications, in that it has no ownership of a wireless phone company, nor is it deploying a fiber optical network to compete with increasingly aggressive cable companies. To achieve the improved results, Qwest has had to work with its existing strengths, although its chairman and CEO Richard Notebaert cited the company's involvement in the multibillion dollar Networx federal telecom project as providing "significant opportunities for Qwest throughout the year and beyond."

"Highlighting the quarter was the GSA's announcement on March 29 that it had awarded Qwest the opportunity to negotiate contracts on the government's Networx program," the firm's financial statement stated. "Under the Networx Universal program -- currently valued at approximately $20 billion over 10 years -- Qwest will compete against two other companies to provide leading-edge voice, data, and video services, including managed and secure advanced data networks, to federal agencies nationwide."

The Qwest report Tuesday followed by a few days the first-quarter financial report by Verizon, which also said its earnings improved.

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