Qwest Incurs Losses

Qwest reported a net loss, including $926 million in charges, totaling $1.14 billion, or 68 cents a share. The previous year the loss was $3.31 billion, or $1.99 a share. Excluding the charges, Qwest's second-quarter loss was $210 million, or 13 cents a share, compared with an operating profit of $128 million, or 8 cents, a year earlier. On average according earnings the company’s loss per share will be 7cents.Second-quarter revenue tumbled 17.3 percent to $4.3 billion from $5.2 billion a year ago. Looking ahead,under the pressure of tight competition and economic results the loss for the year can be from 46 to 49 cents a share. Companiy’s top managers do their best to help Qwest continue to be a leading provider of telecommunications services. Notebaert replaced Joseph Nacchio as CEO in June after the company's former chief came under heavy fire from shareholders because of the $27 million compensation package plus stock options he received last year as Qwest's fortunes, and its stock, continued to dwindle. Qwest also recently was hit with a downgrade of its corporate credit rating and outstanding debt to below investment grade, or "junk bond" status. The company expects to announce soon the sale of all or part of its phone directory unit, QwestDex. Proceeds will be used to pay down debt. The unit could fetch $4 billion to $8 billion. The company also is negotiating with its lenders to give it more breathing room as it works through its current financial troubles. Qwest is in talks with Bank of America about restructuring the covenants of its credit facility, including extending the maturity date and changing the earnings requirements.


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