Qwest Communications International Inc. (Q) posted a 6% decline in third-quarter net income on the further deterioration of its fixed line business, but offered a slightly rosier forecast for full-year adjusted earnings.

The Denver telecommunications company, like its larger peers Verizon Communications Inc. (VZ) and AT&T Inc. (T), has been hit by the downturn in consumer spending, which has accelerated the willingness to drop traditional phone lines. But unlike the other major telcos, Qwest lacks a faster growing wireless arm to offset the slowdown. Instead, it has relied on a slow upgrade of its network to deliver faster Internet service, as well as partnerships with Verizon Wireless and DirecTV Group Inc. (DTV) to keep pace with its cable competitors.

Qwest reported third-quarter net income of $136 million, or 8 cents a share, compared with a year-ago profit of $145 million, or 8 cents a share. Results include a 1-cent charge for costs related to its restructuring, severance and litigation.

Revenue, meanwhile, fell 9.6% to $3.05 billion.

Analysts, on average, had expected earnings of 7 cents a share on revenue of $3.07 billion.

The company also said it expects its full-year adjusted earnings before interest, taxes, depreciation and amortization to be at the upper end of its previously projected range of $4.25 billion to $4.4 billion. It expects full-year capital expenditures of $1.6 billion, down from a prior estimate of $1.7 billion, mainly as a result of lower network volumes, lower maintenance requirements and fewer projects.

Its consumer business continued to decline as consumers opt to go with just their cellphones or switch to a cable phone service. Its mass-market segment saw revenue fall 14% from a year ago.

The company ended the quarter with 10.6 million access lines, down 11% from a year earlier. Meanwhile, broadband subscribers rose 5.7% to nearly 3 million, adding 28,000 during the quarter, and video had a 13% gain. Average revenue per user, a key metric for telecommunications companies, rose 5.4%.

The company has attempted to slow the deterioration by offering a "quad play" of services: phone, Internet, wireless service and satellite TV.

Qwest added 15,000 DirecTV subscribers in the quarter. It also signed up 23,000 new customers through its partnership with Verizon Wireless. Last year, the company switched to the carrier from Sprint Nextel Corp. (S), and expects the transition to be complete by the end of the month, when it completely drops Sprint's service to customers.

The business segment's revenue fell 1% from a year ago to $1 billion. Qwest has seen a much narrower decline on the business side than AT&T and Verizon because it has a smaller presence in business, and still considers it a potential area of growth.

Shares rose 4.4% premarket to $3.60. The stock through Tuesday was up 33% over the past year, but it is down 29% since peaking in early May and is off 5.2% in 2009.

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com