Qwest reports rise in earnings on tax benefit

Qwest Communications reported a jump in third-quarter net income, although revenue dipped as consumers continued to move away from traditional telephone lines, an Associated Press report said.

The report also said CEO Edward Mueller, who was appointed in August, added to uncertainty among analysts and investors by declining to provide details about his plans for the telecommunications company until he completes a strategic review, expected by year end.

For the quarter ended September 30, Qwest reported net income of $2.07 billion, or $1.08 per share, compared with $194 million in the third quarter of 2006, the report said.

The surge in income was due to a tax benefit of $2.15 billion, compared with a tax benefit of $43 million in the previous year's quarter, the report further said.

Qwest also recorded $353 million in charges during the most recent period, stemming from settlements of shareholder lawsuits, it added.

Excluding the special items, earnings would have been $269 million, CFO John Richardson, quoted by the Associated Press report, said.

Operating revenue declined 1.5 % to $3.43 billion from $3.49 billion in the year-ago quarter, the report said.

Total access lines fell 7.2%, reflecting a move by consumers away from traditional phones to cell phones and phone service from cable companies. Qwest also saw a 19% drop in wholesale long-distance services.