Accounting issues pummel Qwest

By Susan Rush
from CED Broadband Direct, July 29, 2002

Shares of Qwest Communications International Inc. were taking a beating today, following news that the company plans to restate earnings for 1999, 2000 and 2001.

Qwest said it improperly accounted for about $1.1 billion in optical capacity sales from 1999 through 2001. The company is in the midst of examining its accounting practices and procedures and may have to restate all optical capacity sales.

Qwest plans to issue new guidance on Aug. 8. Qwest said it will not be able to meet an Aug. 14 deadline set by the Securities and Exchange Commission to verify its financial statements. Company CEO Richard Notebaert said the review will take months. The company declined to estimate the effect of the revenue adjustment.

Qwest is under investigation by the Securities and Exchange Commission, as well as the Justice Department.

WorldCom Inc. filed for bankruptcy last week, a short period after announcing it had misreported nearly $4 billion in expenses.

As of 12:40 p.m. EDT, Qwest shares had shed 28 cents, or nearly 19 percent, and were trading at $1.22.