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Qwest Cost Cuts Help Net More Than Double in Period
A Wall Street Journal News Roundup
Thursday, August 2, 2007

Qwest Communications International Inc.'s second-quarter profit more than doubled, helped by further reductions in spending.

The Denver telecommunications company, which doesn't own a wireless network, has relied on cost cuts and the sale of more data and Internet services to counter a steady decline in the number of local-phone subscribers.

Qwest has turned around its business under the leadership of Chief Executive Richard Notebaert, who plans to leave after the company finds his successor.  A longtime communications-industry executive, Mr. Notebaert, 59 years old, steered Qwest through a reorganization and near-brush with bankruptcy.  He will leave with the company on firmer financial footing.

Mr. Notebaert joined Qwest in mid-2002 as the antithesis to Joseph Nacchio, the former chief executive who was convicted of 19 counts of insider trading.  Mr. Nacchio was sentenced to six years in prison and two years of probation for insider trading.

Mr. Notebaert has three decades of telecom-industry experience, serving as president and chief executive officer of Tellabs and, before that, chairman of Ameritech Corp., a landline carrier that is now part of AT&T Inc.

Qwest will name a new chief executive "sooner than later," said Mr. Notebaert.  "Emphasis on the sooner."

He said he hands the board an envelope every year detailing what the company should do if he were to be unable to serve.  In the note is a list of candidates.  He declined to comment on the names.

Mr. Notebaert said he would prefer a candidate with experience leading a company, as well as experience in the communications and retail sectors.  The company is expected to look both internally and at outside candidates.

He said his successor would be starting in a different position than he did -- his first priority when taking over was to keep Qwest out of bankruptcy -- and that he expects the person to do better than he has.  "I have high expectations," he said.

During the latest quarter, sales inched up 0.5% to $3.46 billion on an unadjusted basis, but revenue from continuing operations dipped 0.3%.  Operating expenses fell 4.2% from a year earlier to $2.9 billion.