Qwest ( Q) said Wednesday that its third-quarter earnings tumbled from last year, and its shares traded lower following a tepid forecast for the rest of 2008.

The Denver phone and data services provider said it had a third-quarter profit of $151 million, or 9 cents a share, falling 20% sequentially and 93% from a year ago. Qwest largely attributed the year-over-year decline to the reversal of the valuation allowance against deferred tax assets in 2007.

Revenue slipped 2% from a year earlier to $3.38 billion, which Qwest said reflects a 9.7% decline in total access lines. Analysts were looking for earnings of 10 cents a share on revenue of $3.33 billion, according to Thomson Reuters.

Looking ahead, Qwest said it expects its full-year results to be at the low end of its previously announced guidance. Last quarter, Qwest said total revenue should be down as much as 2.5% for the full year as the company's mass-markets business will continue to be pressured. On average, analysts expect full-year revenue to decline 2.7% to $13.41 billion.

Qwest's shares slid 12% to $2.29 in early trading, and its year-to-date loss is more than 60%.

"In the quarter, our financial results were again mixed," said CEO Ed Mueller in a press release. "Reflecting our cautious outlook on the near-term direction of the economy, we have taken a number of steps to keep our costs aligned with customer demand and maintain maximum financial strength and flexibility."

Earlier this year, Qwest supplanted Sprint Nextel ( S) as its wireless-services vendor and switched to Verizon Wireless, the joint venture between Vodafone ( VOD) and Verizon ( VZ).

The wireless-customer migration led to a decline in wireless-service revenue, which fell 15% from a year ago and 6% sequentially. "This rate of decline is expected to accelerate in upcoming quarters," the company said. Qwest had previously said full-year wireless revenue could be down 20% due to the migration. Wireless subscribers fell by 45,000.

On the positive side, broadband subscribers increased by 61,000 in the third quarter, compared with 31,000 additions in the previous quarter. The company said it also added 39,000 net video subscribers for a total of 761,000. That's up from the 32,000 video subscriber additions Qwest reported in the second quarter.