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Qwest cuts jobs, guidance
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December 13, 2001: 10:29 a.m. ET
Telecom cuts 11% of staff, lowers revenue, profit, capital spending forecasts.
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NEW YORK (CNN/Money) - Qwest Communications International Inc. said Thursday it is cutting 7,000 jobs and reducing capital spending targets and guidance for future earnings.
The Denver-based telecom company, which provides local phone, Internet and data communications services, said the job cuts will be accomplished through attrition and "continued business process improvement" by the middle of next year. But it will take a $400 million to $600 million charge to cover severance costs during the current quarter. The 7,000 jobs represent about 11 percent of its current work force.
Shares of Qwest (Q: down $0.28 to $11.82, Research, Estimates) were down about 2 percent in heavy early trading.
The company said it is looking for what it called "normalized" earnings per share for the year of between 7 and 8 cents. The forecast of analysts surveyed by earnings tracker First Call is for full-year earnings per share of 11 cents. The company said the results equate to a full-year net loss of between $2.30 and $2.38 a share.
The company also said it expects 2002 reported earnings per share between 17 and 24 cents, and cash earnings per share of 29 to 36 cents.
While First Call couldn't say how the reported earnings guidance for 2002 corresponds to its forecasts, it said the cash earnings guidance is significantly lower than the roughly comparable forecast for earnings per share excluding goodwill of 64 cents.
The company also lowered its revenue forecasts for the fourth quarter and 2002. It said current quarter revenue should be $4.8 billion, below the First Call forecast of $5.1 billion, and that 2002 revenue should be between $19.4 billion and $19.8 billion, below the First Call forecast of $21.1 billion.
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Capital spending next year should be between $4.2 billion and $4.3 billion, down from the previous guidance of $5.5 billion. 
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