Qwest Communications International Inc posted quarterly revenue that was slightly below Wall Street expectations but its shares rose almost 4 percent as it increased its profit outlook for the year.
While Qwest's revenue has been falling as consumers disconnect their home phones it has been cutting costs to help improve its profit outlook.
The telephone operator reported a third-quarter net profit of $136 million, or 8 cents per share, compared with $145 million, or 8 cents per share, a year earlier.
Revenue fell nearly 10 percent to $3.05 billion, missing the analysts' average estimate of $3.067 billion, according to Thomson Reuters I/B/E/S.
The company forecast full-year adjusted earnings before interest, tax, depreciation and amortization at the upper end of its previous target range of $4.25 billion to $4.4 billion.
It also cut its capital spending target for the year to $1.6 billion or lower from its previous budget of $1.7 billion or lower and raised its estimate for full year adjusted free cash flow to a range of $1.6 billion to $1.7 billion from its previous target of $1.5 billion to $1.6 billion.
However, the company said wireless substitution, increased unemployment, low business formation and soft housing trends in its 14-state operating region cut into revenue.
Like bigger operators AT&T Inc and Verizon Communications Inc , Qwest has been losing home phone customers to cable rivals and to wireless as some consumers have forsaken landlines to depend entirely on cellphones.
Total access lines fell about 11 percent in the quarter, with the biggest decline coming in its consumer business, Qwest said.
We are optimistic about our prospects as the economy begins to improve in the quarters ahead, Qwest Chief Executive Edward Mueller said in the earnings statement.
Qwest shares rose 4.3 percent in premarket trade to $3.60.
(Reporting by Sinead Carew; Editing by Lisa Von Ahn)