Taxes Hurt Qwest Earnings

Qwest Communications International Inc. (NYSE: Q) reported Tuesday that it earned $157 million, or 9 cents per share, in the first quarter of the year, down from $240 million, or 12 cents per share, in the year-ago period, blaming the loss on sharply higher tax expenses. Analysts’ consensus estimates were for earnings of 10 cents per share.

Qwest reduced net debt by $304 million to $13.5 billion compared with the first quarter of 2007. Net debt increased $310 million sequentially as a result of cash and investments declining from $1.1 billion at the end of 2007 to $800 million at the end of the first quarter.

The company expects better results due to new ventures. On Monday, Qwest and Verizon Wireless announced a 5-year agreement for Qwest to market and sell the complete line of Verizon Wireless services to Qwest’s consumer, business and government customers. Beginning this summer, Qwest’s consumer customers will be able to buy Verizon Wireless products and services via Qwest’s call centers, retail stores, and kiosks and online at Qwest.com.

Qwest Broadband added 90,000 subscribers in the quarter to reach 2.7 million, up more than 17 percent from a year ago. In April, the company launched Qwest Connect Titanium with connection speeds up to 12 Mbps and Qwest Connect Quantum with connection speeds up to 20 Mbps, the latest Internet services powered by Qwest’s ongoing fiber-to-the-neighborhood (FTTN) network expansion.