Earnings: Qwest Profit Plummets 93 Percent; Plans To Cut 1,200 Jobs

Qwest Communications reported third quarter net income plummeted 93 percent to $151 million or $0.09 per share, compared to $2.07 billion or $1.08 per share a year ago. But the year ago period included a one-time tax benefit of $2.1 billion and a $353 million charge for legal matters, while the current quarter net income includes a charge of $63 million for severance and a lease restructuring benefit of $33 million. Revenue dropped 2 percent to $3.38 billion, which hit analyst expectations forecast at $3.33 billion. Qwest said it would slash 1,200 of its staff, or a little more than 3 percent of its total workforce, during the fourth quarter.
Earnings highlights after the jump
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Earnings Highlights:
Data, internet and video services: Qwest reported strong growth in data, internet, and video services, but this was partially offset by “continued pressure” on voice services. Total data, internet and video revenue increased 10 percent year on year, and four percent sequentially. Data, internet and video revenue in Mass Markets–or Qwest’s consumer unit–grew 12 percent year on year to $341 million, and 1 percent sequentially.
Consumer broadband: Net broadband subscribers increased by 61,000, with nearly 40,000 subscribers purchasing Qwest’s FTTN Network. It now has a total of 2.793 million broadband customers.
Consumer video: Video subscribers increased 39,000 during the quarter to give it a total of 761,000 video subscribers.
Consumer wireless: Wireless subscribers fell by 45,000 as Qwest migrated customers to Verizon (NYSE: VZ).
Voice services: Total voice revenue dropped 8 percent year over year to $1.8 billion, blamed on “increased wireless substitution, cable competition, and deteriorating economic trends. Consumer voice services revenue declined 9 percent compared to the prior year and 2 percent sequentially due to lower access lines. Total access lines at the end of Q3 were 11.9 million, an 8.9 percent year on year decline. Mass Markets access lines were 8 million, a drop of 9.7 percent compared to a year ago.