Jan 12, 2006 9:34 am US/Mountain
Qwest Chief Reiterates Chance Of Profit In 2006
By Sandy Shore, AP Business Writer
DENVER (AP) ―
The head of Qwest Communications reiterated Wednesday his hope that the Denver-based phone company may turn a profit in 2006 after restructuring debt and improving its balance sheet.
Qwest revenue has been flat to slightly higher in the last four to five quarters as sales have risen, Chief Executive Officer Dick Notebaert told analysts at the Citigroup Inc. Global Entertainment, Media and Telecommunications Conference in Phoenix.
"We see the opportunity this year to cross over into profitability, which for us would be, we think, another milestone of where we are going," Notebaert said.
Qwest Communications International Inc. last posted a quarterly profit in the January-March period of 2005 when results were buoyed by the sale of wireless assets to Verizon Communications Inc. The last time it posted an annual profit was in 2003 largely attributed to the sale of its telephone directory business.
Notebaert first mentioned the opportunity for a profit in November when he discussed third-quarter results and a $400 million settlement of a key shareholder lawsuit stemming from an accounting scandal that forced the company to restate billions of dollars in revenue.
Analysts have said Qwest faces challenges because it lacks an independent wireless division, customers for traditional phone service are diminishing and competition for both wireless and Internet customers is growing.
In his address, Notebaert said Qwest has opportunities for increased revenue in such areas as DSL and long distance services where its penetration is less than the industry average as well as Internet-based voice and video services.
The recently settled shareholder lawsuit was among several lodged after the Securities and Exchange Commission said Qwest improperly reported about $3 billion in revenue between April 1999 and March 2002. The company later restated earnings from 2000 and 2001 to erase about $2.2 billion in revenue.
Qwest has settled the SEC lawsuit and many shareholder lawsuits for a combined $650 million. Still pending are a handful of pension fund suits.
Qwest's stock closed up 23 cents, or 4.2 percent, at $5.72 a share on the New York Stock Exchange, near the high end of a 52 week-range of $3.30 a to $5.95 a share.
(© 2006 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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