NEW YORK — Qwest Communications beat Wall Street expectations in the fourth quarter, thanks in part to 1,700 job cuts, but revenues declined amid the weakening economy.

The Denver telco eliminated 500 more than the 1,200 jobs it had announced in October, and now employs 32,937. That's down nearly 11 percent in the past year.

Revenues fell 3.5 percent to $3.32 billion, from $3.44 billion a year ago, as consumers continued to drop their landlines. On the flip side, the company had record business revenue growth of 4.5 percent.

Earnings fell 49 percent to $185 million, or 11 cents a share, but 2007's figures included a tax gain of $106 million. Analysts polled by Thomson Reuters expected earnings of 10 cents a share.

Qwest shares rose 8 cents to $3.45 on a day the market got clobbered.

CEO Ed Mueller said he was pleased with the company's fourth-quarter results.

"Recurring revenue streams are holding up, we're doing great with margins, we had continued good success in the business segment," Mueller said in a telephone interview.

Tom Richards, chief operating officer, said attrition played a part in the deeper job cuts as well as the "opportunity to reduce by a few more people" and get a "head start" on 2009. Qwest didn't announce any new layoffs, but said it would continue to match its work force to work load.

Michael Suby, director of research for Frost & Sullivan's Stratecast division, said there were some positives for Qwest, especially its ability to increase business revenue and margins during a difficult environment.

"Unfortunately," Suby said of the consumer side, "I don't think any providers have found the key to stop or reverse landline loss."

Primary consumer lines fell 11 percent to 6 million year-over- year. Just six years ago, Qwest served 9.2 million primary lines.

Suby said it remains to be seen whether Qwest can maintain strong business revenues.

"If I were to make a bet, the first quarter for everyone will be a harder quarter," he said.

The company said it intends to build six new fiber rings outside its 14-state region to attract additional business.

To lure new consumers, Qwest has been extending fiber to neighborhoods to increase Internet speeds, and it said those higher Internet speeds now reach 1.9 million households.

Broadband subscribers also continue to grow, but at a slower rate.

The company didn't provide a revenue forecast, citing "reduced visibility" into consumer demand because of the economy. Instead, it said that it is focused on generating a positive cash flow of $1.4 billion to $1.5 billion in 2009.

The latest results included a penny-a-share charge for severance payments.

Qwest said it expected to incur about $200 million, or 7 cents a share, in added noncash pension and retiree benefit expenses this year.

For all of 2008, Qwest earned $681 million, or 39 cents a share, compared with $2.9 billion, or $1.52 a share in 2007. Full-year revenue fell 2 percent to $13.5 billion.