Posted on 09/10/2001 10:07:18 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
DENVER -- Qwest Communications International said Monday it is cutting 4,000 jobs, or 6 percent of its work force, and lowered its financial forecast for the fiscal year, citing deteriorating economic conditions.
The Denver-based telecommunications company said it expected 2001 revenue of approximately $20.5 billion and earnings before interest, taxes, depreciation and amortization of about $8 billion.
Qwest had forecast revenue of $21.3 billion to $21.7 billion for 2001. The comparable earnings number from the previous year was $7.36 billion, officials said. Qwest had a net profit for fiscal 2000, of $995 million on revenues of $18.95 billion.
In afternoon trading Monday, Qwest shares rose $1.37, or 7.6 percent, to $19.51 on the New York Stock Exchange.
Analyst David Bench of Arnhold & S. Bleichroeder in New York attributed the rise to bargain hunting.
"It's just a bounce," he said. "The bad news is out and people are looking at this as a time to get in. We think that's premature. We see a continued downturn in the market and don't see a reason to pick it up."
Another analyst said investors are starting to believe that Qwest's stock has hit its bottom.
"By Qwest coming out this morning and giving, I think, a good description of what's going on today and what's going on next year, it provided some level of comfort and assurance that even at that price, the stock was quite attractive," said Frank Governali of Goldman, Sachs & Co.
During a conference call, Qwest chairman and chief executive Joe Nacchio cited declining economic conditions including high unemployment, slow growth in the gross domestic product and other indicators.
"The economic recovery will be later than most people believed 30 days ago and more moderate, and therefore I want to position us to be able to go through that period of time with a strong balance sheet, strong cash position and some certainty that we spent strategically," Nacchio said.
To help offset the expected declines in revenue and income growth, Qwest said it would reduce its work force from 66,000 to 62,000 by the end of the first quarter of 2002. It also will eliminate 1,000 staff positions while adding 1,000 sales executives in its global business unit.
To make the cuts, Qwest will not fill open positions and will continue streamlining operations, a process that began with the acquisition of US West, said Qwest spokesman Tyler Gronbach.
The company also plans to cut capital spending in 2001 from about $8.8 billion to $8.5 billion and reduce its capital budget from about $7.5 billion to about $5.5 billion. That should result in positive cash flow by the second quarter of 2002, six months sooner than previously announced, Qwest said.
In my opinion, Qwest has to be the most abusive piece of crap telecommunications company in existence.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.