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For Qwest, Profit Up, Sales Down and a Loan on the Way

The telecom company also says regulators have expanded their probe of its accounting.

May 30, 2003|From Bloomberg News

Qwest Communications International Inc., the U.S. local-telephone company under investigation for overstating sales, posted a profit for the second straight quarter Thursday and obtained a $1-billion loan to refinance debt.

First-quarter net income was $150 million, or 9 cents a share, Qwest said. The Denver-based company, which had 10 consecutive quarterly net losses through September, also said U.S. regulators have expanded their accounting probe.

Chief Executive Richard Notebaert will use the four-year loan to pay off debt due this year, buying Qwest more time to meet payments on $22.3 billion in borrowings. Qwest was near filing for bankruptcy protection in August before agreeing to sell its phone-book unit. Customers of Qwest and rival U.S. local-phone companies are canceling phone lines as they rely more on wireless calling.

Qwest's first-quarter earnings contrasted with a year-earlier restated net loss of $23.9 billion, or $14.32 a share, caused by asset write-downs totaling $23.1 billion. Sales fell 9.4% to $3.63 billion from $4 billion, the company said. Qwest hasn't filed audited results since the first quarter of 2002 because it hasn't completed restating results from previous years.

Excluding results from Qwest's phone-book operation, which will be sold this year, and an accounting gain, the company had a loss of 7 cents a share. Analysts surveyed by Thomson First Call expected a loss of 9 cents on sales of $3.66 billion.

The number of Qwest's phone lines slid 4.1% to 16.9 million. Sales this year will slip about 5%, Qwest reiterated. The company posted 2002 revenue of $15.5 billion.

Shares of Qwest slipped 10 cents to $4.60 on the New York Stock Exchange.

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