Qwest Communications International (NYSE: Q) is moving lower today after the telecom firm pulled its long-distance phone network off the auction block. The company was attempting to sell its long-distance assets to help generate cash, but reports indicate that bids for the unit were unacceptably low.

Last week, The Wall Street Journal (subscription required) reported that bids for the unit came in below $1 billion, citing sources familiar with the matter. Qwest, which has a debt load of $560 million maturing in 2009, was seeking $2 billion to $3 billion for the business.

This post is part of a feature in which we wonder whatever happened to some notorious financial figures. See the other 17.

As Wall Street implodes around us, the word "hubris" is getting tossed around quite a bit. Hubris -- also known as excessive, overweening pride -- has become the catchall explanation for most of the market's ills. Our financial system has gone up in flames, we're told, simply because so many CEOs and regulators thought they were too smart to fail, no matter how highly leveraged their subprime mortgage portfolios may have been.

Assuming this is true, let's call Joseph Nacchio a trendsetter. As the chief executive of Qwest Communications International (NYSE: Q), Nacchio was determined to construct the world's biggest, best, and most totally awesome fiber-optic network. (Mind you, this was back in the late '90s, when the telecom bubble was just a glimmer in the market's eye.) However, the plucky CEO was driven not by a personal commitment to excellence, but rather by spite.

Nacchio left his old job at AT&T (NYSE: T) because he wasn't granted a plum promotion to president, which he felt he so richly deserved. What better way to show up his former employer than to build a superior network and steal away market share?

Unfortunately, Nacchio's impure motivations were not the best recipe for success. To give you some idea as to how his plans for world telecom domination played out, check out this blog entry I wrote about Qwest and Joseph Nacchio as part of our series on the worst S&P 500 stocks of the past 25 years.

Qwest Communications (NYSE: Q), a telecommunication concern which counts Verizon (NYSE: VZ), AT&T (NYSE: T) and Sprint Nextel (NYSE: S) as esteemed colleagues, issued its Q3 numbers on Wednesday. What do they tell us? Well, for the most part, the numbers, and perhaps more importantly to some extent, the price action, tell us that we should stay away from this low single-digit stock.

Revenues went down roughly 2%. Earnings per diluted share, which came in at $0.09, took a huge dive of 93% on a GAAP basis, but this was driven by a significant tax benefit booked in Q3 2007. Looking at adjusted EBITDA, we see that the drop wasn't so large: Qwest posted $1.08 billion for this metric versus $1.15 billion in the year-ago period. Management didn't see fit to beat expectations, as the call was for $0.10 per share.

However, the company delivered $330 million in adjusted free cash flow, which is representative of a flat growth rate. Hey, the fact that free-cash generation didn't really go down is pretty cool in this case. Management promoted its shareholder-friendly initiatives of dividends and share buybacks in the release. Unfortunately, they aren't enough to bring me to the table where this stock is concerned.

Telecommunication concern Verizon (NYSE: VZ), whose competitors include AT&T (NYSE: T), Sprint Nextel (NYSE: S), and Qwest Communications (NYSE: Q), reported earnings for the third quarter on Monday, and investors could not have been happier. As Wall Street continued its painful bearish slide, shareholders of Verizon were bragging about the 10% rise in the company's stock price. Question is, should you be a buyer of Verizon's stock at this point?

The numbers were decent enough. According to the press release, earnings per share were $0.66. Management only succeeded at matching expectations for Q3, according to this earnings-preview piece by Brent Archer. Honestly, I was surprised at the big pop in the stock yesterday. Considering how badly the markets have been doing, and the fact that we're facing a global recession, I would have figured on a more muted response to Verizon's numbers. After all, if we are facing a tough recession (and I'm fully on board with that sentiment), what's going to happen to the growth rate of the FiOS product? That product is doing well, as are other parts of the Verizon portfolio, but I wouldn't have been a buyer into the stock's strength today. And I say that without a doubt.

But, with Verizon, there is that great dividend yield and cash-flow growth. Operational cash flow from continuing operations was up almost 6%, and capital expenditures decreased. That's great news for dividend investors, as more free cash was left over. I think the market looked at Verizon as being oversold and decided to buy in. The company seemed to have a good Q3, and I think long-term investors will definitely do well with the stock; in fact, the press release mentioned that management saw fit to increase its dividend 7% during the quarter, expressing confidence in the company's current business models. But I believe even longer-term thinkers would do well to wait for a pullback in the share price before either initiating a new position or adding to an existing holding. I simply think there was too much excitement around the stock after its report.

Disclosure: I don't own any company mentioned; positions can change at any time.

"One group of stocks that has always intrigued us are those whose symbols have one letter," notes George Putnam. The editor of The Turnaround Letter explains, "Odd as this idea may at first seem, it actually makes some sense for a deep value investor. These are often old-line companies with well-known brand names. In some cases the single letter symbols were awarded many decades ago."

After reviewing the 19 stocks with single letter symbols (7 are currently unused), Putnam offers six that he says, have been "beaten down pretty badly and now look particularly appealing."'

"Agilent Technologies (NYSE: A), which makes electronic and bio-analytic measuring devices, was spun out of Hewlett-Packard in 1999. Revenues surged in 2000 as did the stock price, reaching a lofty 162.

"But the company subsequently suffered along with its customers in the communications and technology sectors. However, the financials are sound, including strong cash flow that is supporting a $2 billion share buyback, and management has been restructuring and realigning operations for long-term growth.

In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade -- what went wrong, and what happens next.

Permit me, if you will, to draw up an analogy: Qwest Communications (NYSE: Q) is to Wall Street as Lindsay Lohan is to Hollywood. At first, the little redheaded upstart seems to come out of nowhere, and dazzles everyone with her amazing performance. Then, just as quickly as the newcomer rose to fame, she sinks into a massive meltdown, the scope and severity of which is shocking even to seasoned vets. Okay, so this little comparison probably won't find its way onto the SATs, but -- minus the "redheaded" part -- the similarities are kind of eerie.

What went wrong? At lucky number 13 on our list of SPX underperformers, Q shed 77% of its value during the decade that ended on June 30, 2008. The shares peaked at $66 in March 2000, and bottomed out at $1.02 in August 2002 - a 98.5% plunge, top to bottom.

When Colorado-based Qwest burst onto the Big Board in June 1997, it was a company with a vendetta. CEO Joseph Nacchio defected from his executive position at AT&T (NYSE: T) after it became clear that Ma Bell didn't see him as president material. Qwest was in the process of building a massive fiber-optic network, and the upstart was determined to grab market share away from the industry's old giants -- including AT&T, naturally.

Qwest Communications (NYSE: Q), a company whose competitors include Verizon (NYSE: VZ), AT&T (NYSE: T) and Sprint Nextel (NYSE: S), issued its Q1 results on Tuesday, and they weren't inspiring to me at all. Revenues declined 1% to $3.4 billion. Net income took a dive to the tune of 25%, coming in at $0.09 per diluted share. Those are year-over-year declines -- the sequential-quarter comparisons also told a tale of decline. Adjusting the earnings for some tax considerations did, however, yield a net-income increase of almost 6%.

But then there's one of my favorite measures of growth -- free cash flow. Qwest didn't hit this metric. Free cash, on an adjusted basis, was $56 million this time around versus $156 million last time around (I give Qwest credit for increasing its operating cash flow, however). Qwest was able to carve out some double-digit gains in its broadband and video subscribers, but that seemed to be of little help right now.

Overall, I came away from the earnings report -- which told a complex story of adjustments, EBITDA, and such -- not wanting to add this stock to my watch list. According to Briefing.com, Qwest missed expectations by a penny, and its revenues failed to go beyond what Wall Street was looking for. Considering the low price of the shares, and the fact that the dividend yield isn't one I'd chase, I'll feel free to leave this one alone.

Disclosure: I do not own shares in any company mentioned here; positions can change at any time.

MOST NOTEWORTHY: Royal Dutch Shell PLC (NYSE: RDS.A), Broadcom Corporation (NASDAQ: BRCM) and National Semiconductor Corporation (NYSE: NSM) were today's noteworthy upgrades:

• Royal Dutch Shell was upgraded to Buy from Neutral at Merrill Lynch to reflect the company's strong refining backdrop and potential for positive surprise in the gas and power and downstream segments.
• Broadcom was upgraded to Market Outperform from Market Perform at JMP Securities following positive channel checks and the recent court win over Qualcomm Incorporated (NASDAQ: QCOM).
• UBS upgraded shares of National Semiconductor to Buy from Neutral on the Q4 upside, ongoing share buyback and guidance which calls for further margin improvement.

OTHER UPGRADES:

• Banc of America upgraded shares of Qwest Communications International Inc (NYSE: Q) to Buy from Neutral to reflect greater visibility into cash flow generation potential through 2008.
• Banc of America also upgraded Cincinnati Bell Inc (NYSE: CBB) to Neutral from Sell, as they believe the stock is not a sell in a market focused on cash flow.
• Genentech Inc (NYSE: DNA) was upgraded at Deutsche Bank to Buy from Hold based on compelling valuation and fundamental outlook.
• Bear Stearns upgraded shares of Nordstrom Inc (NYSE: JWN) to Outperform from Peer Perform citing the recent share pullback and top-line growth.

"Investors have shied away from the big telcos in recent years because of concerns that their traditional businesses were shrinking," notes George Putnam III, an expert in uncovering turnarounds.

But now, he explains, "After years of concern about the cable companies invading their turf, the big telecoms are now well positioned to fight back."

In his The Turnaround Letter, the advisor looks at seven leaders in the global telecom space, all of which he says represent global leaders, with dominant positions in their local markets and the "potential to grow steadily by expanding the services they offer."

AT&T (NYSE: T) Putnam notes, gained control of Cingular Wireless due to its merger with Bellsouth. The renamed AT&T Wireless, he says, will account for about 35% of AT&T's revenues.

The advisor observes, "In addition to a strong wireless presence, AT&T is rolling out fiber-based landline services. With revenues expected to be north of $120 billion in 2007 and substantial operating cash flow, AT&T is a force to be reckoned with." Further, he notes, the dividend was just raised for the 22nd consecutive year, and the company is expected to repurchase roughly $7 billion worth of stock in 2007.

Qwest (NYSE: Q) ex-CEO Joe Nacchio is currently on trial on 42 counts of fraud and insider trading dating back to stock sales in 2001. He faces the prospect of million of dollars in fines and life in prison. All along, Nacchio has claimed that he had secret information about lucrative government telecommunications contracts that Qwest might obtain. This is what allowed him to continue to make public positive statements about the financial status of the company.

Well, Qwest is in the running for the largest telecommunications contract the federal government has ever put out to bid -- $48 billion over a 10 year period. The General Services Administration contracts covers voice, video and data services for dozens of federal agencies including the Homeland Security Department and FBI.

On Friday, 30 March 2007, the General Services Administration determined that AT&T (NYSE: T), Verizon Communications (NYSE: VZ) and Qwest are still in the running for the contract. Sprint Nextel Corp. (NYSE: S) was eliminated from further consideration because its prices were too high. Qwest is also bidding on another large federal telecommunications contract, this one for $20 billion, to be awarded beginning in May 2007. Look for Nacchio's lawyers to use this information to bolster their client's side of the story.

Now that Qwest (NYSE:Q) is finally back up to the same low price it was in January 2002 -- $8.65 per share -- long suffering investors will be in for a bumpy week as former Qwest CEO Joseph Nacchio's trial on 42 charges of insider trading begins in federal court in Denver. If convicted on most or all insider trading charges, Mr. Nacchio, 57, faces the possibility of life in prison. Legal reporters argue that 10 years in prison and the forfeiture of $100 million in ill-gotten gains is a more likely punishment scenario. What makes Mr. Nacchio's trial more than the usual white-collar fraud trial is that his defense is claiming the case involves national security issues. Unless the four national security agencies involved are willing to provide documentation and allow testimony in open court, Mr. Nacchio cannot possibly receive a fair trial. Thus the charges against him must be dropped. National security agency attorneys are trying to persuade the judge that these national security issues are merely fabrications to deflect attention from Mr. Nacchio's misdeeds.

What is agreed upon is that Mr. Nacchio sold $100 million in Qwest stock in 2001 at a time when he knew Qwest was experiencing financial difficulties. Mr. Nacchio does not dispute that he sold the stock, but due to private meetings with then National Security Advisor Condoleezza Rice, Mr. Nacchio states he was given to understand Qwest would benefit from certain "blackbox" telecommunications national security contracts. When these "blackbox" contracts did not materialize, Qwest experienced financial problems leading it to the edge of bankruptcy. Mr. Nacchio was charged with insider trading in 2005. Mr. Nacchio's trial may set a new low in legal bloviation.

Also in the news, the Associated Press states Qwest founder, railroad baron Philip Anschutz, the man who hired Joseph Nacchio to run Qwest, has entered a private deal to sell almost all of his remaining shares in the company. On February 27, 2007, Mr. Anschutz sold 2.7 million shares for $24 million, an average price of $8.66-8.78 per share. More interesting, however, is his private deal to sell in excess of 20 million shares in 2010 for an undisclosed price. He will receive a current prepayment of $150.5 million from this private deal, details of which are difficult to obtain. Does this sound like a run for the exit to anyone else? What does Mr. Anschutz know about Mr. Nacchio's impending trial that other Qwest investors do not?