Qwest Communications International Inc. (Q:NYSE)

Qwest Communications International Inc. reported unaudited consolidated earnings results for the third quarter and nine months ended Sept. 30, 2009. For the quarter, the company reported total operating revenue of $3.1 billion compared to $3.3 billion for the same period of 2008. Strategic services revenue of $1.1 billion increased by 5% year over year and 1% sequentially reflecting higher demand for IP services. Legacy services revenue of $1.7 billion decreased 14% annually and 3% sequentially. Fewer access lines, from a weak economy and competition, and efforts to improve Wholesale long-distance profitability pressured legacy voice revenue. Customer transitions to IP services impacted legacy data revenue. Income before income taxes was $211 million against $218 million for the same period a year ago. Net income was $136 million, a 6% decline from the year-ago period. In the third quarter 2008, net income reflected lower interest expense and a one-time benefit in other income. Net income declined by 36% sequentially due primarily to a one-time tax benefit recorded in the second quarter. Adjusted free cash flow was $428 million for the quarter, an increase of $98 million from the third quarter 2008. Lower capital expenditures and working capital improvements contributed to strong free cash flow results. Capital expenditures were $341 million bringing the year-to-date total to $1.0 billion. A reduction in projected network volumes, lower maintenance capital requirements and fewer project-specific requirements have contributed to lower capital expenditures throughout 2009. In the quarter, the company continued to strengthen the balance sheet by reducing net debt while improving liquidity. Net debt fell to $12.1 billion from $12.3 billion at the end of the second quarter. EBITDA was $1.1 billion same as for the same period a year ago. For the nine months, the company reported an operating revenue of $9.3 billion, operating income of $1.5 billion, income before income taxes of $0.7 billion, net income of $0.6 billion or $0.32 per diluted share compared to the operating revenue of $10.2 billion, operating income of $1.5 billion, income before income taxes of $0.8 billion, net income of $0.5 billion or $0.27 per diluted share for the same period a year ago. Cash provided by operating activities was $2.4 billion compared to $2.0 million for the same period a year ago. EBITDA was $3.3 billion compared to $3.3 billion for the same period a year ago. The company now expects to achieve full year adjusted EBITDA at the upper end of its prior guidance, which called for a range of $4.25 billion to $4.4 billion. The outlook for full year 2009 capital investments is now $1.6 billion or lower vs. the prior outlook of $1.7 billion or lower. The full year adjusted free cash flow is now expected to be $1.6 billion to $1.7 billion. Prior guidance called for annual adjusted free cash flow of $1.5 to $1.6 billion.

Qwest Communications International Inc. will discontinue Qwest Wireless cellular phone service on Oct. 31, 2009, and is encouraging remaining Qwest Wireless customers to switch to a new wireless provider in advance of the Oct. 31 shutdown. Customers who do not transition to a new wireless service provider by Oct. 31 will have their Qwest Wireless service disconnected, and will forfeit their Qwest Wireless phone number. Qwest Wireless phone numbers are portable until Oct. 31. Customers who switch to a new service provider by Oct. 31 will be able to port their wireless phone numbers to that new provider. Qwest Wireless customers who do not switch their wireless service to another carrier by Oct. 31 will have their service disconnected, and will not be eligible to port their Qwest Wireless telephone number to another provider. There is no early termination fee when disconnecting Qwest Wireless service. Qwest has provided Qwest Wireless customers multiple notifications to transition their wireless service to another wireless provider. Qwest is an authorized agent for Verizon Wireless. Qwest Wireless customers who select Verizon Wireless as their provider can take advantage of combined billing and exclusive handset offers from Verizon Wireless.

A. Duie Pyle upgraded its communications network and enhanced operations using an integrated voice and data solution from Qwest Communications International Inc. Qwest connected 20 A. Duie Pyle locations, including its West Chester headquarters campus and the company's network of service centers and warehouses with Qwest iQ Networking. By implementing Qwest's solution, this privately owned company was able to prioritize between Internet and private data, allowing the company the flexibility needed to properly manage its network, and at less cost than its unmanaged network with their previous provider. The solution uses Qwest's Wide Area Networking connectivity (WAN) based on Multiprotocol Label Switching (MPLS) technology to deliver and protect critical business traffic with speeds of up to 6 megabits per second to each site. The result is a converged networking service that relies on MPLS WAN design to help A. Duie Pyle employees deliver the company's complete offering of transportation, warehousing and distribution services. The tailored, all-in-one Qwest solution interconnects through a scalable managed and redundant high-speed platform that integrates voice and data capabilities.