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Qwest 2Q Net Income Up, But Voice and Wireless Slip

Qwest Communications International Inc. (Q) beat analysts’ expectations for second quarter earnings, but sales fell short. The carrier’s revenue has fallen for 10 consecutive quarters.

The company posted net income of $212 million, up from $180 million a year earlier. That’s 12 cents a share vs. 10 cents a share a year earlier. While income rose 18 percent, revenue decreased 8.6 percent to $3.09 billion. Analysts had expected $3.14 billion.

Qwest said revenue, which declined 9 percent compared to the prior year, was due to lower voice and wireless revenue. “Consistent with the past three quarters, Qwest’s transition from a wireless MVNO model to a reseller model contributed to lower revenue comparisons,” the company said in a press statement. Last year, Qwest began transitioning its wireless customer base from Sprint to Verizon Wireless, a task it said was three-quarters completed at the end of the reporting period.

Voice services revenue declined 13 percent mainly due to consumer access line pressures and ongoing efforts to improve wholesale profitability. The company ended the quarter with 10.9 million access lines, down 11 percent from a year earlier.

Data, Internet and video revenue grew in the quarter by 2 percent vs. the second quarter 2008 as a result of broadband subscriber growth in Mass Markets and continued demand for data products in Business Markets, the company said, noting strategic revenue increased 6 percent on the strength of data products.


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