Qwest reports first-quarter loss
DENVER (AP) – Qwest Communications International Inc. insisted Tuesday that it would meet performance targets for the year, despite reporting a sharply wider first-quarter net loss of $698 million. The company said it lost 42 cents per share for the three months ended March 31, compared with a net loss of $46 million, or 3 cents per share, in the first quarter of 2001.
Excluding after-tax, non-operating items totaling $536 million, the loss was 10 cents per share. That compares with Thomson Financial/First Call’s analyst estimate of 4 cents a share.
Revenue for the quarter declined 13 percent to $4.37 billion from $5.05 billion for the same period last year, largely due to the lack of optical capacity asset sales and certain Internet equipment sales.
Qwest said the non-operating losses of $536 million were primarily due to the company’s investment in KPNQwest, including both a writedown of the company’s equity investment of $462 million and the company’s share of restructuring charges recorded in the quarter by KPNQwest of $74 million.
The company expects a further writedown in the second quarter, given that KPNQwest shares have fallen under $1, down from $3.30 March 31.
Recurring revenue for data and Internet services grew about 3 percent, or $30 million in the first quarter of 2002, compared with the same period last year, and now represents 23 percent of total revenue.
Wireless services increased approximately 28 percent, or $42 million, compared to the same period last year. The company had more than 1.1 million wireless customers at the end of the first quarter, about 23 percent more than at the end of the first quarter of 2001, and average revenue per user increased 2 percent to $51 compared to the same period last year.
Total DSL revenues increased approximately 77 percent from the year-earlier quarter.
Qwest continues to look at selling assets, including all or part of its yellow pages unit. First-round bids are due May 8.
Chief executive Joe Nacchio said he expected employee-related savings to contribute $250 million toward earnings growth for the year. The company has been cutting about 8,400 jobs and 2,500 contractors, chief financial officer Robin Szeliga said.
Shares were up 30 cents at $5.26 in midday trading Tuesday on the New York Stock Exchange.
Additionally, Qwest announced Tuesday that former Morgan Stanley Inc. strategist Stephanie Georges Comfort will replace retiring senior vice president of investor relations Lee Wolfe. Comfort’s appointment is effective May 6.
Comfort spent 17 years covering the telecommunications industry. Wolfe has headed investor relations for Qwest since it went public in 1997.
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