- The Washington Times - Wednesday, February 19, 2003

Here is a look at some of Wednesday's top business stories:


CD yields at historic lows

NEW YORK, Feb. 19 (UPI) — President's Day evokes tributes to George Washington and Abraham Lincoln. But Bankrate.com said certificate of deposit investors are finding fewer presidents in their bank accounts as yields languish at historic lows.

According to Bankrate.com's weekly national survey of large financial institutions, yields trickled downhill again, affecting the interest income earned by many investors.

Bankrate.com said yields on money market accounts fell to 0.76 percent from 0.77 percent a week ago, 6-month CD yields declined to 1.22 percent from 1.23 percent, the 1-year CD yield declined to 1.42 percent from 1.43 percent a week ago and the longer term 5-year CD yield slioped to 3.10 percent from 3.11 percent last week.

Investors willing to shop for their FDIC-insured money market and certificates of deposit nationwide will earn yields far outpacing the national average, the group said.

This week, Bankrate.com found six institutions paying from 2.2 percent APY to 2.4 percent APY on money market deposit accounts, roughly triple the national average.

On one-year CDs, Bankrate.com found six institutions paying 2.4 percent or higher. All yields are available nationally to customers who do not have an existing relationship with the institution.


Qwest Communications posts profit

DENVER, Feb. 19 (UPI) — Qwest Communications International Inc. said it posted a fourth-quarter profit due to one-time gains, but revenues fell amid slack demand for telephone and data services.

Qwest, the dominant local phone company in 14 states from Minnesota to Washington, said it posted a net income of $2.7 billion, or $1.61 a share, compared with a net loss of $645 million, or 39 cents a share during the same period last year.

The latest results included gains from the first stage of the sale of Qwest's telephone directory publishing unit, QwestDex, and the completion of a debt exchange offer in December.

Excluding the items, Qwest said it posted a loss of $35 million, or 2 cents a share, down from a loss of $377 million, or 23 cents a share, a year ago.

Analysts on Wall Street had expected Qwest to post a loss of 11 cents, according to Thomson First Call.

Revenue declined 11.2 percent to $3.7 billion.

Qwest its revenues declined due to continued competitive pressures in local and long-distance voice services, as well as the company's efforts to shift away from less profitable businesses, such as data customer premise equipment resale.

These trends, Qwst said, were partially offset by continued growth of the company's advanced IP product revenue.

Richard C. Notebaert, chairman and chief executive officer, said, "We are beginning to see some positive, stabilizing trends in our core businesses. We are now building positive momentum from the successes of 2002 as we focus on providing customers with excellent service and great value."

Oren G. Shaffer, vice chairman and chief financial officer, said, "We have made significant strides in our efforts to strengthen our balance sheet and position the company for long-term competitiveness.

"We completed our debt-for-debt exchange, which allowed us to reduce debt by $1.9 billion, and we improved our working capital position by $5.1 billion for the year. Moreover, our progress in addressing our accounting and internal reviews enables the Qwest management team to place even greater focus on our core operations," Shaffer said.

Looking ahead, Qwest said it expects 2003 revenue to decline at the same rate or slightly less. The number of telephone access lines in service will continue to decrease, but it expects to lose fewer total lines in 2003 than it did last year.

Consumer long-distance revenues are expected to fall further outside its 14-state home territory, but the declines will be offset as Qwest sees by sales generated within its territory. Demand for data services is expected to remain relatively flat.

The company also said it will continue to monitor market conditions for opportunities to reduce debt through debt exchanges and other financing alternatives.

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