CenturyLink -- formerly called CenturyTel -- has been able to extract profits from landlines where other telecommunications firms have been challenged. Even so, both firms said the number of their respective landlines declined. AT&T and Verizon Communications, the two remaining former Baby Bells, long ago moved into mobile communications as their new profit drivers.
Qwest, which hasn't had its own wireless unit, reported a profit of $158 million for the quarter -- down from $212 million in last year's second quarter. Operating revenue was down $293 billion from $3.09 billion in the year-earlier quarter. Qwest said its Internet subscriber base rose to 2.9 million subscribers, a 4.3% gain.
"We delivered strong financial performance under challenging market conditions during the second quarter," said Qwest's Edward Mueller in a statement. "Our results reflect improving revenue trends, increased margins and added financial strength. We continue to maintain a disciplined focus on execution." Mueller, who is chairman and CEO of Denver-based Qwest, is scheduled to become a member of the CenturyLink board after the acquisition is completed. The headquarters of the combined company will be in Monroe, Louisiana.
CenturyLink is buying Qwest for about $10.5 billion in stock.
The Baby Bells, or Regional Bell Operating Companies (RBOCs) were created more than two decades when the original AT&T was broken up. Most were reassembled by Verizon and the newly-named AT&T and are essentially monopolies in their geographic locations although Verizon and AT&T compete vigorously with each other in wireless.