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Qwest's Loss Narrows

Quarterly revenue remains fairly constant.
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Qwest Communications


said second-quarter revenue just edged up from a year ago, but the phone giant reported that its loss narrowed considerably year over year.

The Denver-based company posted operating revenue of $3.47 billion for the quarter, up from $3.44 billion a year ago. On the bottom line, the company lost $164 million, or 9 cents a share, vs. a loss of $776 million, or 43 cents a share, in the prior-year period.

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The loss of 9 cents a share includes items that widened that number by 2 cents a share, while the year-ago quarter includes items that worsened the loss by 25 cents.

"Qwest's second quarter results demonstrate that our business and marketing strategies work," Richard C. Notebaert, Qwest chairman and CEO, said in a press release. "We continued to steadily improve performance, free cash flows and financial flexibility and are pursuing, in a disciplined way, opportunities to drive future growth and value for all of our constituents."

Second-quarter operating expenses totaled $3.2 billion, down 15% from last year. Capital spending for the quarter dropped to $352 million, including a sales tax refund of $33 million, from $486 million a year ago.

Cash generated from operations was $570 million, and Qwest expects free cash flow for 2005 of $600 million to $800 million before one-time payments. The company reduced total debt, minus cash and marketable investments, by more than $850 million to $14.7 billion in the quarter.

On average, analysts surveyed by Thomson First Call expected a loss of 9 cents and revenue of $3.44 billion for the second quarter.