Qwest losses widen in fourth quarter

Net income at Qwest Communications fell significantly on Tuesday as a result of one-off costs from the early retirement of debt.

But the US telecommunications group said that without the debt reduction, the group would have broken even on a per share basis.

Qwest said that it had successfully tendered for and retired $3bn of high coupon legacy debt in the fourth quarter, and that as a result, interest expenses would be reduced by about $300m this year.

The total net loss reached $528m, or 28 cents a share, in the fourth quarter compared to a loss of $139m, or 8 cents a share, a year earlier. Fourth quarter revenue rose 1.3 per cent to $3.5bn as more customers signed up for wireless and internet services.

“We delivered on our performance goals for revenue, cash flow and continued margin improvement while achieving new highs in service measures and positioning us for profitability,” said Richard Notebaert, chief executive.

Qwest has faced losses in recent years as customers drop local lines and switch to wireless networks but the company said that the decline had fallen to 4 per cent in 2005 compared to 6 per cent a year ago.

Despite the decline in total connections, the number of long distance lines increased by 73,000 in the quarter and by 6 per cent year-on-year and the number of high speed internet lines increased by 10 per cent compared to the previous quarter and 43 per cent year-on-year.

Revenue from wireless subscribers grew 5 per cent compared to the previous quarter as customers increasingly moved to subcription bundles, significantly reducing the churn rate of customers dropping its services.

In early trading, Qwest shares were up 2 per cent at $6.02.