DENVER – Qwest Communications International Inc. (Q) narrowed its fourth-quarter losses to $139 million Tuesday, despite a dip in revenue and a $36 million charge for a tax penalty adjustment.
The loss during the final three months of 2004, which amounted to 8 cents per share, compared with a net loss of $407 million, or 23 cents per share, in the fourth quarter of 2003.
The results beat the expectations of analysts surveyed by Thomson First Call, who projected a loss of 13 cents per share. The Denver-based telecommunications provider attributed the improved results to an increase in the number of subscribers to its DSL Internet service (search), as well as an increase in the sale of Qwest's bundled items, such as landline and long-distance services packaged together.
Qwest shares slipped 1 cent to $3.97 on the New York Stock Exchange (search). The stock has traded in a 52-week range of $2.56 to $5.
Revenue was $3.43 billion during the quarter, down 1.7 percent from $3.49 billion in the same quarter the year before. The company said that was the smallest year-to-year decline in the past eight quarters.
"We are pleased with the progress we have made in 2004 and we like the momentum we have entering 2005 to drive additional growth in our key lines of business," said Richard C. Notebaert, chairman and CEO of Qwest, in a news release issued early Tuesday. "Over the past year, we have focused on improving productivity, extending our financial flexibility and strengthening our competitive position."
For all of 2004, the company lost $1.79 billion, or $1 per share, compared with a 2003 profit of $1.51 billion, or 87 cents per share. Annual revenues shrank 3.4 percent, to $13.81 billion from $14.29 billion. Qwest blamed the decline in revenues on local losses and "competitive pressures in the enterprise market."
The fourth-quarter earnings report was released just one day after Qwest learned its bid for Ashburn, Va.-based long-distance company MCI (MCIP) had been rejected in favor of a lower offer from Verizon Communications Inc. (VZ). Analysts said Monday that the better financial condition of New York-based Verizon likely contributed to MCI's decision to turn back Qwest.
Shares of Qwest dropped 17 cents Monday, a little more than 4 percent, to close at $3.98 a share on the New York Stock Exchange.