DENVER — Despite a sharp fall in revenue, Qwest Communications International Inc. returned to profitability in the first quarter, in contrast to a mammoth loss a year ago.
As part of its ongoing financial restatements, the phone and data company also revealed $3.1 billion in additional losses over the past three years.
Denver-based Qwest, which is under investigation by federal authorities over accounting practices, said Thursday it earned $150 million, or 9 cents per share, in the three months ended March 31.
The company lost $23.9 billion, or $14.32 per share, a year ago. That included a $23.1 billion charge from a required change in its accounting for goodwill.
The latest results included a $206 million gain from Qwest's adoption of a different method of accounting for its pension obligations.
Stripping out one-time gains and revenue from discontinued operations, Qwest lost 7 cents per share, 2 cents better than the forecast of analysts surveyed by Thomson First Call.
Revenue fell 9.4 percent to $3.6 billion, from $4 billion a year ago.
Qwest, like other big telecom companies, is struggling with falling revenues amid competition from wireless providers, cable companies and new technologies.
The Securities and Exchange Commission and Justice Department have been investigating the company's accounting practices, and Qwest has been reauditing its books.
The company already had announced adjustments increasing its 2000 and 2001 net losses by $1.3 billion. With the reauditing process still ongoing, Qwest changed those figures Thursday and added new adjustments for 2002, revealing that it lost $3.1 billion more than originally disclosed from 2000 to 2002.
Qwest also said its revenue was overstated by a total of $74 million in 2000 and 2001 but had been understated by $47 million in 2002.
Chief financial officer Oren Shaffer called the restatement process a "massive undertaking."
Qwest is the dominant local phone service provider in 14 Western states, including Utah. It is gradually regaining its long-distance business throughout the region, which would allow it to bundle local, long-distance, mobile and Internet service in a bid to be more competitive.
Chief executive Richard Notebaert said Qwest is working with a partner to add video services to its phone and Internet offerings. He did not name the partner.
Qwest also announced that it had received a $1 billion loan, which matures in 2007, that it will use to refinance debt, buying the company more time to meet its bills. Qwest was on the brink of bankruptcy in August before Notebaert agreed to sell the company's phone-book business.
"Qwest has done some positive things, including paying down debt and raising cash," said Bruce Allen, who helps manage $250 million including Qwest stock and bonds for Cascade Financial Management in Denver.
Qwest's former CEO Joseph Nacchio combined the company, which had been primarily a long-distance carrier for businesses, with local-phone provider US WEST Inc. in 2000. Nacchio was ousted and replaced by Notebaert last June amid Qwest's plunging share price and the government accounting probes.
In the past year, Qwest trimmed its workforce 14 percent to 49,878 employees.
Qwest shares were up 22 cents, 4.7 percent, at $4.92 in midday trading on the New York Stock Exchange.
Contributing: Bloomberg