For Qwest (NYSE:Q), the Dick Notebaert era has ended and the Ed Mueller era has begun.
On Sunday night, the Denver-based telecom announced that Mueller, a former chief executive of Ameritech and Williams-Sonoma (NYSE:WSM), would replace the retiring Notebaert.
Notebaert says that Mueller was his top choice to replace him. That's good news. Notebaert performed as well as anyone could in sparing Qwest from bankruptcy. But is Mueller really the answer? I wonder, because his stint at Williams-Sonoma appears to have been decent but marred by declining returns on capital, and that's a bad sign:
|
Metrics |
FY 2007 |
FY 2006 |
FY 2005 |
FY 2004 |
|---|---|---|---|---|
|
Revenue |
$3,727.5 million |
$3,538.9 million |
$3,136.9 million |
$2,754.4 million |
|
Return on capital |
19.5% |
20.8% |
21% |
21.1% |
Note: Mueller was CEO of Williams-Sonoma from 2003 to July of 2006
Perhaps that's unfair. Let's give Mueller the benefit of the doubt and call Williams-Sonoma a retail experiment that was only moderately successful. But as we do, it's important to remember that Qwest is in the midst of a turnaround of its own. So, can investors realistically expect better results?
Maybe Notebaert's word is enough. This, after all, is the guy who navigated through the mess left by "Jumpsuit" Joe Nacchio and, in the process, trimmed costs, streamlined debt, and made a serious bid for MCI in a locked-horns battle with Verizon Communications (NYSE:VZ).
Mueller should face many similar challenges, thanks to better-funded national rivals like AT&T (NYSE:T). Meanwhile, hungry cable and satellite rivals such as Comcast (NASDAQ:CMCSA) and EchoStar (NASDAQ:DISH) are also after Qwest's core business. Will he be able to keep them at bay and still manage growth? Notebaert thinks so, and I sure hope he's right.
Embark on a quest for related Foolishness:
- Say hello, Jumpsuit Joe.
- Thanks, Dick, for everything.
- Qwest stock was under attack in June.
Fool contributor Tim Beyers lives in Denver and is a Qwest customer, but he didn't own shares in any of the companies mentioned in this article at the time of publication. The Motley Fool's disclosure policy once owned a 1972 fastback Mustang that it swears would win the Denver Grand Prix.
