Qwest Revises Guidance for 2002; Cuts 2,000 Employees

Qwest Communications International

Wall Street estimates are for revenue of $19.2 billion for the year.

Qwest also said it would lay off an additional 2,000 employees, bringing its employee count to 53,000.

Qwest has cut its financial outlook and employee base several times over the past year. In December 2001, Qwest cut its growth outlook and laid off 7,000 employees.

In recent months, Qwest's problems have mounted. A Securities and Exchange Commission inquiry into its 2000 and 2001 accounting practices became formal this month. At the time, Qwest said the SEC is recommending action against the carrier for excluding information related to its acquisition of US West in a January 2001 earnings release.

Also this month, Qwest adjusted its fiscal 2001 fourth-quarter and year-end unaudited results. The carrier increased its loss by 1 cent per share for both reporting periods. The adjustment raised its year-end loss to $4.02 billion from $4.01 billion and the fourth-quarter loss to $529 million vs. $516 million.

Qwest also expects to take a $20 billion to $30 billion charge in the second quarter of this year because of a decline in the value of acquired assets, including US West.

Qwest is slated to announce its first-quarter 2002 results next Tuesday.

By noon on Friday, Qwest stock was trading at $6.78, a 79 cent drop from Wednesday's close of $7.57.