Qwest Narrows Quarterly Loss

Qwest Communications International Inc. said Tuesday that it narrowed its fourth-quarter loss to $139 million, and its chief executive promised to look for other opportunities after losing a bid to acquire MCI Inc.

Richard C. Notebaert, chairman and chief executive of the Denver-based telecommunications company, said Qwest might benefit if competitors involved in pending mergers were required by federal regulators to shed certain assets.

“There will be some real antitrust questions as well as regulatory,” Notebaert told analysts during a conference call. “From where we sit, there’s lots of opportunity and there’s lots of things that could unfold in the months to come.”

Qwest learned this week that its bid for Ashburn, Va.-based long-distance company MCI had been rejected in favor of a lower offer from Verizon Communications Inc. Analysts said the better financial condition of New York-based Verizon probably contributed to MCI’s spurning of Qwest.

Notebaert declined to comment on whether Qwest was looking at other assets or companies, although he conceded that he was disappointed by MCI’s $6.7-billion cash-and-stock deal with Verizon.

“[It was] just a couple of years ago that we were written off as dead or going bankrupt. If you’ve noticed anything in the past couple of weeks, it’s probably that Qwest is a little bit on the feisty side,” Notebaert said.

“No one expected us to do what we did, so I’m sure that we’ll continue down the path of looking at every opportunity, and maybe we’ll surprise some people again.”

For the September-December quarter, Qwest’s loss was 8 cents a share, compared with a net loss of $407 million, or 23 cents, in the fourth quarter of 2003. The results beat the expectations of analysts surveyed by Thomson First Call, who projected a loss of 13 cents a share.

Revenue was $3.43 billion, down 1.7% from $3.49 billion in the same quarter the year before. The company said that was the smallest year-to-year decline in the last eight quarters.

Notebaert attributed the improved results to an increase in DSL Internet service subscribers and increased sales of packaged services, such as land-line and long-distance services. Although access line losses continued, the rate of loss was lower than in the previous quarter, the company said.

For all of 2004, Qwest lost $1.79 billion, or $1 a share, compared with a profit of $1.51 billion, or 87 cents, in 2003. Revenue shrank 3.4%, to $13.81 billion from $14.29 billion. The company blamed the decline in revenue on local losses and “competitive pressures in the enterprise market.”

Qwest shares rose 6 cents to $4.04 on the New York Stock Exchange.