CenturyLink, Qwest report soft earnings, expect April merger closing

Qwest Communications reported a fourth quarter 2010 loss of $161 million, along with declining revenue and landline loss, while pending merger partner CenturyLink reported lower profit for the same period and ongoing, but less drastic landline loss. Qwest was seen mostly as meeting analyst expectations, while CenturyLink’s number were declared a miss by some.

Qwest also indicated that the CenturyLink deal likely would close by April 1, almost one year after the $10.6 billion merger was announced, assuming the companies win regulatory approvals from four more states and the Federal Communications Commission by then. The public utilities commission in one of those states, Minnesota, last week delayed its approval of the deal until at least next month.

Qwest’s Q4 net income loss was largely due to multiple one-time charges Qwest faced, but the company’s revenue also slid about 3 percent during the quarter. Qwest ended 2010 with about 8.9 million landlines overall, representing an 11 percent drop for the year.

Meanwhile, CenturyLink saw its profit for the fourth quarter dip to $232.2 million from $286.7 million for the same period in 2009. The independent telco experienced landline loss at a rate of about 7.6 percent during 2010, with overall lines declining from just over 7 million to just over 6.5 million.

Both companies did well on the broadband Internet front with CenturyLink adding about 29,000 high-speed Internet customers during the fourth quarter, and Qwest adding 92,000 fiber-to-the-node broadband customers, but losing about 77,000 DSL customers. CenturyLink also announced it would resell wireless services from Verizon Wireless, which is already Qwest’s resale partner.

Analysts covering CenturyLink appeared concerned with the outlook provided by the company, especially CenturyLink’s plan to increase capital spending by 16 percent to about $1 billion this year.