Since reinstituting dividend payments about three years ago, Qwest Communications has distributed about $1.66 billion to shareholders.
And despite reporting a net loss of $55 million or $0.03 per share for fiscal year 2010, the Denver-based company continued to pay fairly large dividends to its shareholders.
In the fourth quarter, Qwest returned $139 million to shareholders, bringing the total amount of dividend payments last year to $555 million. And on Jan. 24, Qwests board declared that it would pay a dividend of $0.08 per share on Friday.
In setting a dividend payment, a board of directors typically considers a companys profitability, its cash flow and investors expectations, said Donna Jaegers, a financial analyst with D.A. Davidson & Co.
Although Qwest reported a net loss in 2010, the company would have posted an operating profit had it not been for some special items, said Jaegers, who has been following Qwest for many years.
Qwests loss was driven by $867 million in special items. That included a $475 million loss in connection with the payment of convertible notes premium,” a Qwest spokesperson said. Excluding special items, Qwest reported annual earnings per share of $0.44, said Qwest Senior Vice President of Investor Relations Kurt Fawkes, in a recent earnings call with investors.
On Dec. 13, 2007, Qwest announced that it would reinstitute a dividend payment for the first time in more than six years.
In 2008, Qwest made dividend payments totaling $556 million. In 2009, the same year Qwest reported a profit of $662 million, the company returned $551 million to shareholders.
Fridays dividend may be the last from Qwest before it is acquired by CenturyLink.
In its fourth-quarter earnings announcement, Monroe, La.-based CenturyLink revealed that it anticipates closing its acquisition of Qwest on April 1.
Dow Jones reported last month that the stock transaction valued Qwest at approximately $13.33 billion based on Qwests closing price ($7.64) on Wednesday, Jan. 5. Shares of Qwest have fallen somewhat since then and closed Friday at $6.79 on the New York Stock Exchange.
Under the CenturyLink-Qwest transaction, which still is subject to approval by three states and the Federal Communications Commission, Qwest shareholders will receive .1664 shares of CenturyLink stock. That means someone with 10 shares of Qwest will receive 1.664 shares of CenturyLink.
Qwest has about 1.74 billion shares outstanding,” which the New York Stock Exchange defines as the number of shares of outstanding stock held by stockholders” and excluding so-called treasury stock that has been issued in Qwests name.