Telecom giant

Qwest

(Q)

beat analysts' profit estimate with its fourth-quarter results Tuesday, although strong performance in its data, Internet and video businesses was offset by weakness in voice and wireless.

The Denver phone and

data services

provider said it had a third-quarter profit of $185 million, or 11 cents a share, down 49% from $366 million and 20 cents a year ago, but just above analysts' estimate of 10 cents.

Qwest partly attributed the year-over-year decline to a fourth-quarter severance charge of $19 million and said that its earnings were impacted by higher pre-tax income compared to the year-ago quarter. The firm's income before taxes increased 17% year over year, it said.

The company, which cut 1,700 jobs, or 11% of its workforce, during the fourth quarter, is doing all the right things to cope with a tough economy, according to Edward A. Mueller, Qwest's chairman and CEO.

"Our improved profitability in the fourth quarter reflects an intense focus by the entire team," he said, in a statement released Wednesday. "Under challenging market conditions, we delivered strong performance across each of our business units."

The firm's Business Markets division grew its revenue 4.4% year over year to $1.1 billion, although its Mass Markets business declined 7% to $1.4 billion. Wholesale Markets sales were also down 7% year-over-year to $789 million.

Qwest's fourth-quarter revenue slipped 3% from a year earlier to $3.3 billion, although this was in line with analysts' estimate of $3.31 billion.

In the fourth quarter, Qwest's revenues from its data, Internet and video businesses grew 8% year over year, although this was offset by a decline of 9% in voice revenue and a 33% slump in wireless revenue.

Last year, Qwest supplanted

Sprint Nextel

(S) - Get Report

as its wireless-services vendor and switched to Verizon Wireless, the joint venture between

Vodafone

(VOD) - Get Report

and

Verizon

(VZ) - Get Report

.

For the full year, Qwest posted revenue of$13.5 billion, down 2% from $13.8 billion in the prior year and just above analysts' estimate of $13.47 billion.

Qwest, which posted a 93% year-over-year drop in its third-quarter

profit

thanks to a tax valuation allowance, had offered a

disappointing forecast

for its fourth quarter.

For fiscal 2009, Qwest said that it is maintaining a cautious view on guidance.

The company expects adjusted cash flow of between $1.4 billion and $1.5 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) of between $4.2 billion and $4.4 billion.

"Capital investment is forecasted to be about $1.8 billion and will be closely aligned with business conditions," Qwest said.