) posted third quarter 2013 adjusted earnings of 63 cents per
share, in line with the Zacks Consensus Estimate. Comparing with
the prior-year quarter, the results dropped 4.5% from 66
Quarterly revenues of $4,515 million marginally beat the Zacks
Consensus Estimate of $4,509 million. Revenues fell 1.2% from
$4,571 million in the third quarter of 2012.
revenues declined 2.1% year over year to $1,503 million in the
third quarter. The legacy business was hammered by increased
Access Recovery Charges. However, strategic revenues remain
high based on high-speed Internet, Prism TV subscriber addition
and rate hikes on selected services. This was mainly responsible
for the decline. The segment registered Prism TV subscriber
growth of over 17,000.
revenues were $1,544 million, flat year over year. The company's
strength in high-bandwidth offerings were weakened by declining
legacy services and data integration revenues.
segment generated revenues of $878 million, down 3.5% from the
prior-year quarter. The drop was due to reduced access rates and
lower long distance and switched access minutes of uses. The
company completed over 1,200 fiber builds in the quarter and is
on track to cover 3,500-4,000, which is lower than the previous
estimate of 4,000 to 5,000 fiber builds throughout the year given
revenues increased 4.6% year over year to $342 million, driven by
growth in managed hosting along with colocation service
At the end of the third quarter, total access lines were
13.150 million compared with 13.950 million in the year-earlier
quarter. CenturyLink added nearly 33,000 high-speed Internet
customers during the quarter, bringing the total to 5.942 million
(up 2.3% year over year).
CenturyLink exited the quarter with $266 million of cash and
cash equivalents compared with $211 million at the end of 2012.
Long-term debt increased to $20,391 million from $19,400 million
at 2012 end. The company generated operating cash flow of $4,408
million at the end of the third quarter, while free cash flow was
For the fourth quarter of 2013, the company expects adjusted
earnings and operating revenues of 55 cents to 60 cents and $4.50
billion to $4.55 billion, respectively. Operating cash flows are
expected between $1.75 billion and $1.80 billion.
CenturyLink reaffirmed its financial guidance for 2013.
Revenues are expected at $18.05-$18.20 billion, reflecting a drop
of 1% to 1.8% from the last year. Adjusted earnings are expected
in the range of $2.63 to $2.73 per share. Operating cash flows
will likely be $7.35 billion to $7.50 billion, while capital
expenditure is estimated at $2.9 billion to $3.0 billion.
CenturyLink - which has business tie-ups with
Verzion Communications Inc.
) - has a Zacks Rank #3 (Hold).
With a reformed operating base, we expect the company to
perform impressively in the coming months backed by broadband
expansion, completion of fiber builds, better cloud computing
services and the launch of Prism TV in new markets.
However, stiff competition from operators like
LEAP Wireless International Inc.
Frontier Communications Corporation
), deteriorating legacy voice and access revenues, regulatory
issues and constant need for technology upgrades may impact the
company's operating performance.
CENTURYLINK INC (CTL): Free Stock Analysis
FRONTIER COMMUN (FTR): Free Stock Analysis
LEAP WIRELESS (LEAP): Free Stock Analysis
VERIZON COMM (VZ): Free Stock Analysis Report
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