Qwest Communications International reiterated that it's on track to meet its 2001 targets Monday, thanks to strong sales for its high-tech Internet services in January. The company also said it will re-enter the long-distance business in several states.
Shares in the broadband Internet communications company closed off 59 cents a share to $35.90 Friday.
Just a month ago, on Jan. 24, Qwest (NYSE: Q) had already confirmed its 2001 targets for revenue and earnings before interest, taxes, depreciation and amortization (EBITDA). The news came along with fourth-quarter 2000 results. You can't blame the company for reiterating the news, with competitors like Sprint (NYSE: FON), coming out with warnings.
Qwest said sales of high-tech Internet-based services in January were strong, keeping the company on track to meet its 2001 target of $21.3 billion to $21.7 billion for revenue and between $8.5 billion to $8.7 billion for earnings before interest, taxes, depreciation and amortization (EBITDA).
Qwest also expects revenue for the first quarter of 2001 to grow 11.5 percent to 12.5 percent over the pro forma normalized revenue of the first quarter of 2000.
The company cited strong January sales for services including Web hosting in its CyberCenters; Digital Subscriber Line (DSL); Direct Internet Access (DIA), which gives businesses direct high-speed access to Qwest's global broadband fiber-optic network; application services provided by Qwest Cyber.Solutions; and optical network services to wholesale firms. It also said traditional data services and access line growth in January were on track.
A large chunk of Qwest's business comes from high-growth data and broadband areas, something which has saved it from the woes faced by other long-distance carriers.
Chairman and CEO Joseph P. Nacchio released the news in a keynote address Monday at a conference for the National Association of Regulatory Utility Commissioners in Washington. Nacchio said Qwest has made service improvement its top priority since acquiring US West 8 months ago. The company also said Monday that it is now ready to re-enter the long distance market once it gains regulatory approval.
First, the company has to demonstrate to state and federal regulators that its local service area is open to competition. Nacchio said the company has made several major steps to do so, including major wholesale agreements with McLeodUSA and Eschelon Telecom.
Qwest intends to file its first application with the FCC (Federal Communications Commission) this summer to re-enter the long-distance business in one of the states in its local service area and to file applications for other states later this year and early next year.