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Qwest beats 2Q estimates

Qwest Communications International Inc. (Nasdaq: QWST) posted second quarter earnings a penny above First Call's prediction.

Before the market opened Tuesday, Qwest, which operates an international fiber-optic network, reported second quarter net income of $186.9 million, or 2 cents a share. First Call consensus looked for a penny.

Shares closed at 28 1/16 Monday, and have been slumping below their 52-week high of 52 3/8 since Qwests's announcement of plans to mergewith US West Inc.

Revenue grew 122 percent over the second quarter of 1998, to $873.7 million from $393.7 million, while communications services revenue for the quarter more than tripled from to $790.4 million from $239.8 million.

Data and Internet services continued as Qwest's fastest-growing segment, posting more than a 100 percent increase in revenue over the 1998 quarter. The data and Internet services segment now makes up more than 20 percent of Qwest's communications services revenue.

Qwest also reported 11 percent sequential growth in communications services revenue, after adjusting for the contribution of the EUnet operations to the KPNQwest joint venture, which closed in early April. Equity investment by BellSouth also helped the company "strengthened its balance sheet," said Robert S. Woodruff, Qwest executive vice president and chief financial officer.

Other highlights of the quarter included Qwest's joint venture with KPMG LLP called Qwest Cyber.Solutions LLC, which will accelerate distribution and customize the delivery of Applications Service Provider (ASP) services to customers. The venture has multi-year contracts valued at more than $400 million. To support the venture, Qwest also reached strategic relationships with SAP America, Hewlett-Packard, Siebel Systems and Oracle Corporation.

Qwest also announced that it will invest $90 million for a 18 percent stake in Advanced Radio Telecom, a provider of high-speed fixed wireless network services to complement Qwest's Digital Subscriber Line (DSL) investments and local broadband construction plans.