report a loss
Gains in high-speed Internet and small-business revenues are
likely to be offset by losses of land lines.
By Beth Potter, Staff Writer
Tuesday, February 14, 2006
Qwest is expected to show a jump in high-speed Internet and
small-business revenues in its fourth-quarter earnings
report, which is set for release today.
But analysts also expect the Denver-based phone company to
show a roughly 5 percent loss of traditional telephone
Donna Jaegers, an analyst at Janco Partners in Greenwood
Village, said Colorado's largest public company is expected
to post a loss of 31 cents per share for the year on stable
revenues of about $13.9 billion. Estimates appear to be in
line with Wall Street expectations, Jaegers and other
"They would like to surprise Wall Street on the upside,"
Jaegers said. "They'll try to make it a positive outcome,
but I think 2006 is going to be a tougher year for Qwest
than 2005 because Comcast is rolling out their service more
Cable giant Comcast Corp. is launching Digital Voice in many
of its markets, including Denver. The Internet call service
is expected to appeal to Qwest's bread-and-butter telephone
Qwest has its own Internet phone service available to
high-speed Internet customers.
Late last year, Qwest said it had 1.3 million high-speed
In its earnings report, the former Baby Bell is expected to
say it added at least 128,000 high-speed Internet lines in
the fourth quarter, according to a pre-earnings estimate
from analyst David Barden at Bank of America.
Jaegers said Qwest also likely added more than 10,000 new
small-business lines in the same period.
The Bank of America report also expects Qwest to show a drop
of 4.8 percent in traditional phone lines to 14.8 million
lines in the fourth quarter.
Qwest declined to comment Monday on fourth-quarter earnings
because of Securities and Exchange Commission regulations
governing such reports. Qwest chief executive Dick
Notebaert has said the company expects to be profitable
sometime this year.
The company's $15 billion in long-term debt is still
troubling at a time when it needs to turn up the heat to
fend off cable - and satellite-TV competition, said Tim
McElgunn at Frost and Sullivan, an industry analyst firm.
Qwest refinanced its debt late last year from about $17
billion to the current figure, a move expected to generate
an additional $300 million in free cash flow.
McElgunn said Qwest needs to spend that money on fiber-optic
network upgrades to compete.
Qwest shares closed at $5.90 Monday, a gain of more than 26
percent from its $4.66 price when third-quarter earnings
were announced Nov. 1.
Staff writer Beth Potter
can be reached at 303-820-1503 or