The bad news just keeps piling on for Qwest Communications International Inc.
as the regional Bell operating company announced a $698 million loss and modest
digital-subscriber-line growth for the first quarter.
The Denver-based Baby Bell -- beset by investigations into its finances and a
stock price that has dipped below $5 per share -- blamed the bulk of the
42-cent-per-share loss on a $536 million one-time charge mostly related to its
investment in European telco DPNQwest.
Absent that charge, Qwest would have recorded a loss of $162 million (10
Revenue also foundered in the quarter, dropping 13.5 percent to $4.37 billion
compared with $5.05 billion posted for the same quarter in 2001.
Qwest blamed this drop on the discontinuation of optical-capacity assets and
Internet-equipment sales -- both transactions the Federal Trade Commission is
now examining as part of an investigation of Qwest.
Adjusted earnings before interest, debt, taxes and amortization totaled $1.45
billion, compared with $2 billion in the same period last year.
In the DSL business, Qwest added 36,000 customers for the quarter, a 58
percent increase compared with the first quarter of 2001. That raises its
subscriber base to 484,000. Revenue from DSL also rose 77 percent.
Capital expenditures, meanwhile, were cut to $1.2 billion from $2.94 billion
Despite the gloomy quarterly results, Qwest is predicting that it will become
cash-flow-positive in the second quarter
'We believe we can improve financial performance while maintaining our high
levels of customer service, and that our unique combination of assets positions
us well to grow shareowner value,' chairman and CEO Joseph P. Nacchio said in a
Qwest is still anticipating further weakness in telecommunications and the
economy for the rest of 2002.
It is projecting that it will take in total revenue of between $18 billion
and $18.4 billion for the year, with adjusted EBITDA falling in the range of
$6.4 billion to $6.6 billion and capital expenditures totaling $3.1 billion to