Qwest Communications reported a second quarter 2004 net loss of $776 million, or $0.43 per diluted share, including special items. Revenue for the quarter was $3.44 billion, a 4.3% decrease from the second quarter of 2003, and a sequential decline of approximately one%. The net effect of the special items was an incremental charge against the current quarter’s results of $487 million, or $0.27 per share.
- CAPEX: capital expenditures for Q2 totaled $486 million, versus $505 million in Q2 2003. The decrease in capital expenditures was largely the result of a reduction in information technology projects, which was partially offset by the deployment of additional DSL facilities.
- BUNDLES: penetration increased to 36%, compared to 32% at the end of the first quarter. Qwest also plans to introduce new service bundles in Q3.
- DSL: added 109,000 DSL subscribers in Q2 to end with 853,000 total DSL subscribers. In addition, the company deployed approximately two thousand remote terminals (RTs) during Q2, expanding its DSL footprint to cover over six million households. Qwest expects to exceed one million DSL subscribers by year end and to make DSL services available to about 65% of households within its operating region. Additionally, Qwest has partnered with Best Buy to make DSL services available at 82 of its retail locations in the 14-state local service area.
- LONG DISTANCE: added 733,000 long distance lines in Q2, taking total lines to 4.1 million. Long-distance penetration of total retail lines increased to nearly 30%, as compared to 24% at the end of the first quarter. Qwest also announced that the number of previously reported long-distance lines in the fourth quarter of 2003 was overstated by approximately 133,000 lines. Accordingly, the total line count as of the fourth quarter of 2003 and the first quarter of 2004 have been adjusted to 2.2 million and 3.4 million, respectively. This change had no effect on revenue.
- VoIP: In the third quarter, Qwest launched its business class VoIP services in four markets. The company remains on track to complete the rollout of business and consumer VoIP services by the end of the year to all major metropolitan markets within the local service area, as well as to businesses in select out-of-market areas, by the end of the year.
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