ability to unload its directory business helped prop up its fourth-quarter earnings, although the company continues to see revenue slide and said the decline will continue in 2003.
The telephone giant, which is the subject of several accounting investigations, said net income totaled $2.7 billion, or $1.61 a share, in the fourth quarter compared with a loss of $645 million, or 39 cents a share, last year. The latest quarter included $2.77 billion of income from discontinued operations, reflecting proceeds from the sale of the QwestDex directory business. The company posted a $17 million loss from continuing operations in the latest quarter.
Revenue fell 11.2% to $3.7 billion and the company predicted a similar decline in 2003. "Fourth quarter revenues declined due to continued competitive pressures in local and long-distance voice services, as well as the company's efforts to shift away from less profitable businesses, such as data customer premise equipment resale," Qwest said. "These trends were partially offset by continued growth of the company's advanced IP product revenue."
Qwest said on a normalized basis its loss was $35 million, or 2 cents a share, in the latest quarter, compared with the First Call consensus of a loss of 11 cents a share.
On the expense side, Qwest's cost of sales and SG&A expenses for the fourth quarter declined 11.2% percent, over the third quarter, with about half the improvement coming from a reduction in operating expenses, the rest from a re-estimate of accruals relating to regulatory settlements and bad debt reserves.