Qwest sales jump more than 300 percent
The long distance phone company says said fourth quarter revenue surged more than 300 percent, driven by strong demand for phone, Internet, and data services.
The nation's No. 4 largest long distance telecommunication company said revenue for the quarter was $865.1 million, an increase of 319 percent from a year ago.
Before one-time charges on merger and debt-related costs, Qwest earned 3 cents per share, beating consensus estimates by a penny, according to First Call.
"We are pleased with another quarter of strong financial performance while we continue to invest in growing our business on a global basis," Qwest CEO Joseph Nacchio said in a statement. "Through the acquisitions and partnerships we completed in 1998, we successfully transitioned Qwest from building a state-of-the art network into a leading, Internet protocol-based multimedia company focused on the convergence of data, video, and voice services."
Including one-time charges, the company posted a fourth quarter loss of $21.6 million, or 6 cents a share, compared with a year-ago profit of $12.3 million, or 6 cents a share.
Qwest said earnings before interest, taxes, depreciation, and amortization (EBITDA) were up nearly four-fold to $148.3 million over the year-ago period.
The new-age carrier has expanded its network reach through alliances and acquisitions. Last November, Qwest entered the European market with a joint venture with Dutch telco KPN to build and operate a Internet protocol-based fiber optic network, linked to Qwest's North American network for data, video, and voice services. Last week, the companies announced the completion of the first of six planned fiber optic rings in Europe.
For the quarter, Qwest said communications services revenue grew to $670.1 million, a seventeen-fold increase from the fourth quarter of 1997. Internet and data services revenue growth was greater than 600 percent.
The growth in data services was led by gains in ATM and frame relay revenue, which increased more than 200 percent from a year ago.
"In 1998 we were focused on growing our base of customers, revenue, and network assets," Qwest chief financial officer Robert Woodruff said in a statement. "During the year we achieved a number of significant financial and strategic milestones that helped establish momentum in our effort to promote wide-spread use of Internet and Web-based communications services."
For the full year, Qwest recorded $2.24 billion in total revenue, EBITDA of $294.5 million, and a net loss per share of $3.02. On a pro forma basis, the company had total revenue of $3.02 billion, an EBITDA of $416.7 million, and a net loss of 8 cents per share before one-time costs.
Earlier today, Qwest announced it has been awarded a subcontract by TRW to provide advanced communications services to the U.S. Treasury Department. Qwest will help support the Treasury Communications System, a network that interconnects Treasury and all of its agencies throughout the United States, Canada, and Mexico.
Last month Qwest invested $15 million in Covad Communications, right before the competitive local exchange carrier's successful IPO. Qwest will offer digital subscriber line (DSL) service via Covad as part of the deal.
Qwest has completed construction of 12,500 miles of its U.S. fiber optic network, and is on track to complete the entire 18,500 miles, linking more than 130 cities, by midyear.
Some analysts note, however, that many of the emerging carriers, or new network builders, such as Frontier, Level 3 Communications, Williams Communications, as well as Qwest, may be attractive takeover targets as their network buildouts continue.