CenturyLink Inc. Earnings: Booking a Profit Again

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Rising revenue was not enough for S&P 500 (NYSE:SPY) component CenturyLink Inc. (NYSE:CTL) as the telecom services company saw profit fall in the first quarter. CenturyLink is a communications company that offers communications services, including Internet access, broadband services, and voice services.

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CenturyLink Earnings Cheat Sheet for the First Quarter

Results: Net income for the wireline-regional fell to $200 million (32 cents per share) vs. $211.1 million (69 cents per share) a year earlier. This is a decline of 5.3% from the year-earlier quarter.

Revenue: Rose more than twofold to $4.61 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: CenturyLink Inc. reported adjusted net income of 68 cents per share. By that measure, the company beat the mean estimate of 59 cents per share. It fell exactly in line with the average revenue estimate of $4.61 billion.

Quoting Management: “CenturyLink delivered solid financial results again this quarter, highlighting our continuing growth of broadband and PrismTM TV customers, as well as good operating expense control,” said Glen F. Post, III, chief executive officer and president. “We continue to improve our top-line revenue trend and deliver strong subscriber results while investing in key strategic initiatives and meeting our synergy targets for both the Qwest and Savvis integrations. Our local operating model continues to help drive revenues and improve customer trends.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased more than twofold to $4.65 billion in the fourth quarter of the last fiscal year. The figure rose more than twofold in the third quarter of the last fiscal year from the year earlier and climbed more than twofold in the second quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the fourth quarter of the last fiscal year with net income of 55 cents versus a mean estimate of net income of 61 cents per share.

Net income has dropped 34.2% year-over-year on average across the last five quarters. Performance was hurt by a 57.3% decline in the second quarter of the last fiscal year from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 63 cents a share to 59 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $2.54 a share to $2.40 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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