May 1 (Bloomberg) -- Qwest Communications International Inc., the fourth-largest U.S. phone company, said first-quarter profit almost tripled after it cut retiree benefits and lowered costs tied to routine installations.

Net income increased to $240 million, or 12 cents a share, from $88 million, or 5 cents, a year earlier, Denver-based Qwest said today in a statement. Sales declined less than 1 percent to $3.45 billion.

Operating expenses fell 6.2 percent after Chief Executive Officer Richard Notebaert standardized the way technicians add new Internet connections and make repairs. The number of primary home-phone lines dropped 7.1 percent as customers switched to cable providers' voice service or moved to mobile phones.

``The business is continuing to shrink, but they're shrinking costs faster,'' said Donna Jaegers, an analyst at Janco Partners Inc. in Greenwood Village, Colorado, who rates the shares ``sell.''

Shares of Qwest rose 23 cents, or 2.6 percent, to $9.11 at 4:03 p.m. in New York Stock Exchange composite trading. The stock has risen 31 percent in the past year.

Qwest has used a package of high-speed Internet and phone service, along with satellite TV from DirecTV Group Inc., to battle a similar combination of services from cable providers such as Comcast Corp. Last year, the strategy helped Qwest produce its first annual profit since 2003.

More Cuts

Profit beat the 9-cent average estimate of 18 analysts surveyed by Bloomberg, while sales trailed a prediction for $3.49 billion. Of 23 analysts who follow Qwest, five recommend buying the shares, 12 advise holding and six say sell.

Qwest can continue to lower expenses throughout the year with programs that increase productivity and measure how well employees are doing their jobs, Notebaert said in an interview.

``What we're doing is asking people to perform up to their capabilities and then giving them the tools to let them do that,'' he said.

Qwest's costs will also decline as regulatory changes allow it to combine its long-distance service with the rest of its business, the company said today. Prior rules designed to encourage competition had forced that business to stay separate.

Internet, Phone

Total high-speed Internet users rose by 167,000 to 2.3 million, following 165,000 additions in the previous quarter. Primary residential phone lines totaled 7.2 million.

Consumers spent an average of $52 for Qwest's non-wireless services, up from $49 a year ago and from $51 in the previous three months. The revenue per user beat a $51.38 estimate by UBS AG analyst John Hodulik in New York.

If cable competition intensifies, Qwest may have to increase its spending on marketing and selling its own services, said Todd Rosenbluth, an analyst at Standard & Poor's in New York.

`` That's going to make it harder for them to widen margins,'' said Rosenbluth, who has a ``sell'' rating on Qwest shares.

During the quarter, Qwest also benefited from lower depreciation and amortization costs, which fell 11 percent to $612 million. The company made an accounting policy change that lowered its amortization expenses for software.

To contact the reporter on this story: Crayton Harrison in Dallas at tharrison5@bloomberg.net.

Last Updated: May 1, 2007 16:16 EDT