Qwest closer to dividend decision
Notebaert, Shaffer defend telco's pace
Jeff Smith, Rocky Mountain News
Qwest's top executives this week hit the road to tout the company's financial progress, but they shed little light on whether the Denver telco will soon re-institute a dividend.
Qwest CEO Dick Notebaert spoke Wednesday at an investor conference hosted by Goldman Sachs in New York, while Chief Financial Officer Oren Shaffer talked at a Banc of America event in San Francisco on Monday.
At both events, analysts and investors wanted to know what is taking Qwest so long to decide whether to issue a stockholders dividend out of its increasing cash flow.
"It feels like there must be some tension at the board level," one analyst said at the Banc of America conference.
Shaffer said he would "dissuade" a person of the notion that tension exists, characterizing the Qwest board of directors as doing the right thing in methodically evaluating its options. He said the board is "getting close" to a decision.
Notebaert declined to give a timetable in his talk at the Goldman Sachs event, saying the directors needed to work "at their own pace."
The telco eliminated its dividend in 2002 after former CEO Joe Nacchio cut it from $2.14 to 5 cents a share annually after the merger with U S West in 2000.
The board is considering whether to issue a dividend, buy back stock or do a combination of the two. Several analysts believe the company will be hard- pressed not to include a dividend as part of its decision.
In their talks, Notebaert and Shaffer emphasized Qwest's financial strides, reflected in part by two consecutive profitable quarters and stable revenues despite the continuing loss of home land lines.
Notebaert said the availability of high-speed Internet service in Qwest's 14-state territory has more than doubled from 32 percent in 2002 to 81 percent today.
Moreover, he said, the average monthly revenue per customer has increased from $43 two years ago to $49 today, and more than 50 percent of Qwest's customers are buying bundles of communications services.