Qwest’s revenue continues to fall due to slack demand for telephone and data services.
Qwest, which is facing a federal probe and only last week announced it would have to restate its revenues for 2000 and 2001, has reported Q4 net income of $2.7 billion, compared with a net loss of $645 million for Q4 2001. Revenue was down 11.2% at $3.7 billion. The fourth-quarter profit included $2.77 billion of income from discontinued operations, reflecting proceeds from the sale of the QwestDex directory business.
For the full year to December 31, Qwest reported a net loss of $35.9 billion, compared with a net loss of $4.8 billion in 2001. Full-year revenue dropped 7.5% to $15.5 billion. The year-end results include $40.9 billion of charges to write down the value of goodwill and network assets. Looking forward, the company predicted that revenue declines in 2003 will be the same, or slightly smaller than last year’s 7.5% drop.
The company blamed the Q4 revenue decline on continued competitive pressures in local and long-distance voice services. It also blamed the company’s efforts to move away from less profitable business, such as data equipment resale. However, these trends were partly offset by continued growth of the company’s IP product revenue.
On a brighter side, Qwest did manage to reduce total debt, less cash and cash equivalents, from $25 billion to $20 billion in the fourth quarter. This was achieved through the realization of the $2.75 billion in QwestDex sale gross proceeds, and a debt exchange offer that reduced outstanding total debt by $1.9 billion.
Following the downturn of fixed-line usage, Qwest has been closing businesses, selling assets, and paring debt to compensate. While its debt situation has improved, with another restatement of 2000 and 2001 revenues on the cards, an SEC investigation in progress and falling revenues, Qwest is by no means out of the woods yet.
You can download a FREE technology report at www.dmfreereports.com
