Qwest 2Q Net Doubles, But Falls Just Short of Estimates

Qwest Communications' 2Q profit more than doubled to $246 million, or $0.13/share, helped by cost-cutting, but fell short of the Street's consensus estimate of $0.15/share, even when backing out a $22m (approx. $0.02/share) charge for an employee early retirement program. Sales fell 0.3% to $3.46b, missing analyst expectations by $10m. Operating costs declined 4.2% on the quarter. Qwest reported a sizable increase in adjusted cash flow, $679m vs. $84m, as its net debt fell $356m to $13.4b and capex totaled $744m compared to $832m last year. Qwest said it executed 45% of its approved $2b share buyback during the quarter and reached the halfway point by the time of its 2Q earnings release. Its shares lost 1.3% to $8.53 on Tuesday and are down 2.7% in very thin pre-market trading. Qwest's earnings call is at 9 a.m. EDT. Check for Qwest's earnings call transcript later today.

Sources: Press release, Bloomberg, MarketWatch, Reuters
Commentary: Did Qwest Stock Rise Too Fast For A Buyout? • Qwest: Private Equity Buyout Not Likely • Five Telecoms Chosen for Government Contract; Sprint Makes Cut
Stocks/ETFs to watch: Q. Competitors: T, S, VZ. ETFs: IYZ, TTH, VOX

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