The pros and cons in Qwest Communications' second-quarter 2009 earnings reflect how the weakened economy is affecting the entire telecom industry. The service provider reported that net income rose 18 percent to $212 million during the second quarter, while earnings per share rose by 20 percent to 12 cents. However, operating net operating revenue declined 9 percent to $3.1 billion.
Performance of Qwest's business, mass markets and wholesale businesses were a mixed bag. Qwest's Business Markets segment reported $1.0 billion in total revenue. The company reported that strategic mass market revenue, a segment that includes high speed Internet, video and its Verizon Wireless-related services, saw a 5 percent increase, while voice service revenue declined 10 percent annually and 3 percent from the first quarter. One of the shining stars in its Mass Markets segment was broadband services, which added 34,000 subscribers in the second quarter. Qwest attributed the growth of its broadband subscriber base to its ongoing FTTN network build out. However compelling the gains in Mass Markets and business segments were, Qwest's wholesale segment dropped 14 percent to $712 million.
Despite the mixed results, Qwest's chairman and CEO Ed Mueller believes the company is layering the foundation to better compete in the market when the economy does recover. "While current market conditions dictate a cautious approach, we continue to invest in areas of the business that will define our future, including expanded broadband capabilities and significant product development to support continuing demand for our enterprise services," Mueller said in a release.
- Here's the official release
Qwest profit surges 37 percent
Qwest enhances the broadband user experience