DENVER   —   Qwest Communications International reported a $3.3 billion loss in second-quarter profit Tuesday, and blamed the drop mostly on a write-off from its European joint venture.
    Total revenue for the three months ending June 30 was $5.22 billion, up 12.2 percent. Analysts said the results, excluding one-time expenses, met expectations for income of $128 million, or 8 cents per share.
    The loss of $3.3 billion, or $1.99 a share, compared to a net loss of $121 million, or 14 cents, a year earlier.
    Qwest said the loss came primarily because of $3.72 billion in one-time charges, including a $3.11 billion writedown from its European joint venture, KPNQwest. It also paid $415 million in charges related to its merger with U S West.
    "We simply wanted to be extra cautious in complying with what some people call arcane accounting rules," chairman and chief executive officer Joseph P. Nacchio said. "It's non-cash, it's non-operating, it doesn't change our view of the influence in Europe.
    "We don't think that the reduction in accounting value in investment is important because we don't have any intention or need to sell any portion," he said, adding the paper loss does not affect operating growth.
    The company also scrapped a $1.65-billion deal to sell 540,000 access lines in nine states to Citizens Communications Co., saying the Stamford, Conn.-based company postponed the deal and made false statements. Qwest, which took wrote off $222 million in depreciation, filed for arbitration Monday seeking damages.
    "At the end of the day we are not in a distress circumstance and we don't give things away," Nacchio said.
    Qwest's stock was trading at $27.41, down $1.14 in early afternoon trading. That's about half of its 52 week high of $54.81.
    Qwest provides long distance and broadband services as well as and local phone service in 14 Midwestern and Western states, including New Mexico.
    Qwest was required to sell its long-distance business in U S West's former service region last year when it bought U S West for $44 billion. Federal Communications Commission guidelines prohibit a Baby Bell from offering long-distance service in its region unless state regulators deem it has improved customer service and allowed competitors to use its network. An independent test of that system is underway.
    Nacchio said the company expects to get regulatory approval by June of next year and begin offering long distance in the former U S West territory by September of 2002. ABQ Journal

US West was riddled with Y2K problems before they
were bought up by Quest ::::-§

-- Anonymous, July 25, 2001