October 30, 2002, 4:54 PM — The red ink continues to flow as Qwest Communications International Inc. reported another losing quarter Wednesday. The company lost US $214 million in the third quarter compared with a loss of $142 million ($.09 per share) in the third quarter of 2001.
The company announced that revenue shrank from $4.37 billion to $3.80 billion compared with the same period one year ago.
Qwest cited competition in the market for local and long-distance voice services, the sluggish economy and a reduction in revenue from data and IP services as it sheds less profitable businesses and attempts to streamline its operations.
Qwest's $0.13 loss per share falls in line with analysts expectations of a per-share loss between $0.11 and $0.19.
The losses were widespread. Qwest's business services unit reported a decline in revenue of $86 million from $1.57 billion in the third quarter of 2001 to $1.48 billion in the same period this year. The company's consumer services group reported losses of $141 million for the third quarter of 2001, with revenues of $1.39 billion. Revenue from the wholesale services unit decreased by $395 million from $1.3 billion the third quarter of 2001 to $905 million this year.
The company noted new business accounts with the government and in the private sector, as well as increased market penetration for its consumer services, as reason to be hopeful. The company also suggested that it would consider increasing the price of some of its wholesale services to increase profits.
Qwest reaffirmed prior forecasts for year-end results in 2002, indicating that it expects to lose between $785 million and $818 million for the year.
On Tuesday, Qwest announced that it would take a goodwill impairment charge of about US$24 billion and an additional $10.8 billion charge due to the reduced value of its network, customer lists and technology, the company said late Monday.
Qwest also announced Tuesday that it would defer $531 million in revenue booked on sales of optical capacity since it took over US West Inc. in mid 2000. The review of the optical capacity sales in 2000 and 2001, which was announced earlier, has now been completed, the Denver-based telecommunications company said in a statement.
Amsterdam-based correspondent Joris Evers contributed to this report.