CenturyLink Inc. Earnings Cheat Sheet: The Profit Streak Continues

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 third 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 Third Quarter

Results: Net income for CenturyLink Inc. fell to $140 million (23 cents per share) vs. $231.2 million (76 cents per share) a year earlier. This is a decline of 39.4% from the year earlier quarter.

Revenue: Rose more than twofold to $4.6 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CTL reported adjusted net income of 34 cents per share. By that measure, the company fell in line with the mean estimate of 34 cents per share. Analysts were expecting revenue of $4.6 billion.

Quoting Management: “CenturyLink achieved solid third quarter results, as we continue to make good progress with the Embarq, Qwest and Savvis integrations, while maintaining our focus on serving our customers and strengthening our revenue growth opportunities,” Glen F. Post, III, chief executive officer and president, said. “We generated strong free cash flow of $891 million during the quarter, while also making strategic investments to expand and enhance our high-speed Internet, Prism TV and high-bandwidth Ethernet services, to deploy fiber-to-the-tower (FTTT), and to expand our managed hosting and cloud services capabilities. We added nearly 57,000 new high-speed Internet customers during the quarter and achieved 5% growth in pro forma strategic revenues year-over-year. “We are confident that our local operating model will help us gain market share in the legacy Qwest markets and we expect to leverage additional cross-selling opportunities among our business segments,” Post continued. “We believe CenturyLink is well-positioned to continue driving long-term shareholder value and strong financial results in the years ahead.”

Key Stats:

The company fell in line with estimates last quarter after missing forecasts in the previous quarter with net income of 64 cents versus a mean estimate of net income of 66 cents per share.

Net income has dropped 26.6% year over year on average across the last five quarters. Performance was hurt by a 57.3% decline in the second quarter from the year earlier quarter.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased more than twofold to $4.41 billion from the year earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 64 cents per share to 34 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $2.66 a share to $1.71 over the last ninety days.

Competitors to Watch: AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), Sprint Nextel Corporation (NYSE:S), PAETEC Holding Corp. (NASDAQ:PAET), Cbeyond, Inc. (NASDAQ:CBEY), Telephone & Data Systems, Inc. (NYSE:TDS), tw telecom inc. (NASDAQ:TWTC) and IDT Corporation (NYSE:IDT).

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(Source: Xignite Financials)