Qwest CEO Successor To Be Named “Sooner Rather Than Later”

Qwest (Q) CEO Richard Notebaert Wednesday morning asserted that the company’s second quarter performance was “very good,” and that the company “is doing exactly what we said.”

In a brief interview with Tech Trader Daily following the company’s earnings announcement Wednesday morning, Notebaert says the company reported “strong cash flow,” and noted that net income “increased and feels very strong.” He did note that EBITDA margin was “down ever so slightly,” due to some seasonal factors.

Notebaert points out that the company has bought back $1 billion worth of stock 10 months into a planned $2 billion stock repurchase program, and is “well ahead of schedule.” He also noted that the company had reduced its net debt by $356 million since March 31, and by $580 million from a year ago.

Revenue was up 0.5% sequentially in the quarter, he notes, and should gain momentum in the second half, in particular in the company’s business markets group, where he expects growth in the mid-single-digit range.

Notebaert points out that it now re-sells DirectTV (DTV) to 8% of its consumer customer base. He says there is no urgency for the company to follow Verizon’s (VZ) lead into the IPTV market. “We have not seen massive customer acceptance of that product,” he says. “The jury is still out…Right now we continue to watch, and keep watching, while growing bandwidth.” The notion of deploying FiOS to the home, he says “is not the best capital decision for us.” While it isn’t impossible that Qwest could eventually go in that direction, he says it would be “an awfully long way off.”

The company does not provide quarterly guidance, but he notes that Qwest has set a goal of increasing EBITDA this year by up to $400 million from last year’s base of $1.4 billion. He also says the company has set a goal for EBITDA margins in the mid-30s.

Qwest’s shares are off 18% since Notebaert announced his retirement in June. He says that “the elephant in the room” on the company’s conference call Wednesday morning was the open question of who the next CEO will be. “People would like to know who my replacement is,” he says. “They want to know if there is going to be a change in direction.” Notebaert has agreed to stay on until a replacement is in place. He says an announcement of his successor should come “sooner rather than later;” asked if that means the new CEO would be in place one quarter from now, he suggests that “sooner rather than later” would lead you to that conclusion.