NEW YORK (CNNfn) - Qwest Communications International posted a fourth-quarter loss Wednesday as a result of acquisition costs and debt retirement, but saw a substantial increase in revenue
Denver-based Qwest (QWST) reported a fourth-quarter loss of $21.6 million, or 6 cents per diluted share, compared with a profit of $12.3 million on fewer shares outstanding, a year earlier.
Excluding costs related to acquisitions and debt prepayment, Qwest earned $10.4 million, or 3 cents a share.
The company's earnings beat analysts' expectations by a penny. They had pegged Qwest's earnings at 2 cents a share, according to First Call.
Revenue in the fourth quarter increased more than 300 percent to $865.1 million from $206.4 a year ago. On a pro forma basis, adjusted for acquisitions, total revenue rose 26 percent.
Last week, the company landed a $1 billion deal to upgrade the U.S. Department of Treasury's communications system, the largest contract in the company's history
CNNfn spoke with Qwest Chief Executive Officer Joe Nacchio about his company's recent flurry of acquisitions and what the company looks to accomplish in the years to come.
Commenting about the recent government contract, Nacchio said, "Well, you know, that was a very significant contract. It's the largest contract we've ever won. We're going to actually be upgrading the data network that sits behind the different agencies that comprise the Department of the Treasury.
"So besides adding a billion in revenue, which is our estimate over the next six years or so," he added, "I think it will be an enormous boost in terms of credibility for our people who are selling into the large end of the business market today."
Nacchio was upbeat about Qwest's ability to survive in the highly competitive Internet service market. "We're really the first company that built a network
designed exclusively for the kind of technologies that drive the Internet," he said.
"So while we compete in traditional long-distance telephone markets against, for example, MCI WorldCom, where our real growth will be in the future is providing broadband data networks, Internet protocol networks, which is what this Treasury bid is ultimately about."
For the year ended Dec. 31, Qwest recorded $2.24 billion in total revenue and a net loss of $3.02 per diluted share on a net loss of $844 million. This compares with earnings of $14 million, or 7 cents per diluted share, on revenue of $696.7 million in 1997.
Shares of Qwest traded up 1-11/16 to 61-13/16 on the Nasdaq Wednesday morning.