DENVER -- Qwest Communications International Inc. (Nasdaq: QWST) today announced its third quarter 1997 results reflecting a total revenue increase of 326 percent, which includes an increase in services revenue of 76 percent. This resulted in earnings per share growth of 200 percent. Qwest is building a Macro CapacitySM Fiber Network across approximately 16,000 miles in the United States, designed to deliver multimedia content - data, images and video - as seamlessly as voice. This high-speed broadband network will empower businesses and consumers with a new generation of multimedia applications. Revenue for the quarter ended September 30, 1997 totaled $188.9 million, an increase of $144.6 million or 326 percent compared with $44.3 million for the quarter ended September 30, 1996. Communications services revenue for the quarter totaled $32.5 million, an increase of 76 percent over the $18.4 million reported in 1996. Net income for the third quarter of 1997 was $12.7 million ($0.12 per share) compared to net income of $3.5 million ($0.04 per share) for the same quarter of 1996. Net income for the third quarter of 1997, excluding the Growth Share Plan charge (see Note 1), was $15.3 million ($0.14 per share) compared to $3.5 million ($0.04 per share) for the third quarter of 1996. The increases in earnings per share of 200 percent and 250 percent (excluding the Growth Share Plan charge) were attained even with a 20 percent increase in weighted common shares outstanding, as a result of the company's recent initial public offering. EBITDA for the third quarter of 1997 was $24.9 million compared to $4.7 million for the same quarter of 1996. EBITDA for the third quarter, excluding the Growth Share Plan charge, was $29.1 million compared to $4.7 million for the same quarter of 1996. "We are extremely pleased with our third quarter results. We continued to meet our growth plans, lighting up the Sacramento to Denver and the Denver to Kansas City portions of our network; securing additional rights-of-way for our U.S. network buildout and securing agreements to extend our network to Mexico, Southeast U.S. and the California Valley. We also agreed to acquire Internet service provider SuperNet; and formed a strategic alliance with Cisco Systems," said Joseph P. Nacchio, president and CEO of Qwest. "Finally, we launched a nationwide branding campaign to raise awareness with customers and, with the recent addition of several key executives, have united a world-class senior management team." Year-To-Date Earnings Revenue for the nine months ended September 30, 1997 totaled $490.3 million, an increase of $360.5 million or 278 percent compared to $129.8 million for the nine months ended September 30, 1996. Net income for the nine months ended September 30, 1997, was $2.3 million ($0.02 per share) compared to a net loss of $8.9 million ($0.10 per share) for the same nine months of 1996. Net income for the nine months ended September 30, 1997, excluding the Growth Share Plan charge, was $46.6 million ($0.50 per share) compared to a net loss of $8.9 million ($0.10 per share) for the same nine months of 1996. EBITDA for the first nine months of 1997 was $11.2 million compared to a negative $2.7 million for the same period in 1996. EBITDA, excluding the Growth Share Plan charge, was $80.6 million, compared to a negative $2.7 million for the same period in 1996. Carrier Services Carrier services revenue for the third quarter of 1997 was $14.1 million, up 53 percent from $9.2 million for the same quarter of 1996 and up 2.2 percent from the second quarter of 1997 of $13.8 million. The revenue mix for carrier services improved with continued growth in "on-net" dedicated line services, replacing lower margin, resold switched minute services. In the future, Qwest will continue to emphasize higher margin, higher quality dedicated line services. Commercial Services Commercial services revenue for the third quarter of 1997 was $18.4 million up 100 percent over the year ago level of $9.2 million and up 79 percent from the second quarter of 1997. This increase reflected the targeted roll out of an unbranded dial-around offer. The national brand launch on October 6 will facilitate the transition to branded offers, which are now being tested. The establishment of regional direct sales offices for business customers continues from West to East. "We are very happy with our services business results which reflect customer acceptance of Qwest and the strong appeal of a leading edge network design that will deliver such a broad scope of voice and data services," said Nacchio. "We believe we are well positioned to deliver the solutions customers are looking for to take their communication capabilities into the 21st Century." Construction Business Construction revenue for the third quarter of 1997 was $156.5 million, up 504 percent from $25.9 million a year ago; reflecting continued strong progress in the network buildout. The company has approximately 14,400 miles of the rights-of-way secured; approximately 7,900 miles of conduit in the ground; approximately 5,600 miles of fiber optic cable installed; and in excess of 2,800 miles of network activated. The $156.5 million quarterly revenue compares favorably with the $204.6 million reported in the second quarter of 1997, which included $95.8 million in revenues related to GTE contract milestones met along segments with previous construction activity. Note 1: The Growth Share Plan was the company's management incentive plan prior to the IPO, which is accounted for similar to a stock appreciation rights plan.
About Qwest Qwest Communications International, Inc. (Nasdaq: QWST), is a multimedia communications company building a high-capacity, fiber optic network for the 21st century. Qwest's planned domestic network will connect 125 cities, which represent approximately 80 percent of the data and voice traffic originating in the United States, upon its completion in the second quarter of 1999. Qwest is also extending its network 1,400 miles into Mexico with completion slated for late third quarter 1998. With its cutting-edge technology, Qwest will deliver high-quality voice, data and video connectivity securely and reliably to businesses, consumers and other communications service providers.
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