leaders seeking respect
CEO Richard Notebaert cites stable revenues, a lawsuit
settlement and improved cash flow.
By Beth Potter, Staff Writer
Wednesday, November 9, 2005
Qwest executives want a little more respect - and they
believe they've earned it.
"We're at the corner, and we don't have to bend to look
around it," Qwest chief executive Richard Notebaert said
Tuesday in an interview at The Denver Post.
Notebaert highlighted measurable improvements at the
Denver-based phone company that he took over three years ago
when it was on the brink of bankruptcy.
Qwest on Nov. 1 announced stable third-quarter revenues and
improved net income.
It also announced a $400 million settlement in a shareholder
lawsuit related to accounting irregularities under former
Qwest CEO Joe Nacchio.
Recent debt refinancing will generate an additional $300
million in free cash flow, and Qwest's stock price closed at
$4.66 on Tuesday, showing a steady climb over the past six
Qwest chief financial officer Oren Shaffer said analysts are
just starting to understand the transformation underway at
Qwest. He said four analysts have upgraded their
recommendations in the last week.
Even though Qwest expects to see improved cash flow because
of its refinancing, its debt will still be rated below
"Our objective is to get back to investment-grade credit
ratings," Shaffer said.
To do that, the company will need to get its debt closer to
$12 billion. Its debt has hovered around $17 billion for the
Local analysts say the company has done a great job of
putting itself on stronger financial footing but still has
to stay on its toes to meet the challenges of the rapidly
changing telecommunications industry.
One of the biggest threats to Qwest's bread-and-butter
telephone lines is Philadelphia-based Comcast Corp.'s. plan
to roll out Internet phone service in Colorado next week,
said analyst Donna Jaegers.
"Comcast is starting to more aggressively roll out the voice
over IP (Internet protocol). That's the risk: The Comcast
footprint overlaps 40 percent of (Qwest's) residential
lines," Jaegers said.
Bring on the competition, Notebaert said.
"We have to think like Target, with changing prices and
changing bundles," he said. "I think it's a very difficult
and challenging industry with the technology changes, but
it's also a great challenge."
Staff writer Beth Potter
can be reached at 303-820-1503 or