Qwest Reports $1.14 Billion Loss
Qwest Communications International
Qwest said it expected revenue of $17.1 billion to $17.4 billion for 2002, and earnings of $5.4 billion to $5.6 billion, roughly $1 billion lower than an already lowered forecast this spring.
The second-quarter loss of 68 cents per share was significantly smaller than a loss of $3.31 billion, or $1.99 per share, in the second quarter 2001. In both quarters the company took hefty writedowns on the value of its stake in bankrupt Dutch telecommunications services company KPNQwest.
Excluding a $740 million writedown of its KPNQwest, bad debt reserves of $119 million associated with WorldCom's bankruptcy, and asset impairments on real estate held for sale of $59 million, losses in the latest quarter were 13 cents per share. Analysts surveyed by Thomson First Call were expecting a loss of 7 cents per share on that basis.
The company however managed to have free cash flow of $320 million in the quarter, as promised under former chief executive Joe Nacchio.
"We are aggressively taking the steps necessary to maximize the profitability of our core operations, deliver our balance sheet and improve the delivery of services to our customers," new CEO Richard Notebaert said in a statement.
Qwest announced last month it expects to restate earnings from 2000 and 2001, after finding accounting mistakes. The company reportedly is negotiating a possible settlement with the Securities and Exchange Commission over its accounting.
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