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swung to a third-quarter lossThursday and posted a 3% revenue decline.

The Denver telco lost $569 million, or 31 cents ashare, in the quarter ended Sept. 30. That reversesthe year-ago profit of $1.8 billion, or $1.05 a share,though that figure was aided by a $2.5 billion profitfrom discontinued operations.

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On a so-called adjusted basis, excluding certaincosts, Qwest lost 15 cents a share in the latestquarter, compared with 16 cents a year earlier.Revenue fell to $3.45 billion from $3.57 billion ayear earlier. The latest quarter's numbers are in linewith Wall Street estimates.

Qwest said its access lines fell 4.1% from a yearago and 1% sequentially. Meanwhile, Qwest added102,000 digital subscriber lines for high-speedInternet service. The company also said it hasincreased its so-called bundle penetration,representing customers who take two or more servicesfrom Qwest, to 43% from 21% a year ago.

"Our ability to improve operating results thisquarter, along with focused cost and balance sheetmanagement and progress in our facilities costoptimization initiatives, fueled sequential marginexpansion and solid improvement in our cash flow fromoperations," said Finance Chief Oren G. Shaffer. "Weare pleased with our momentum exiting the quarter andbelieve we are well positioned to drive furtherrevenue, margin and cash flow improvement."

Qwest was flat early Thursday at $3.41.