CenturyLink's Profit Rises Despite Another Revenue Decline

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By Anna Prior

CenturyLink Inc. said fourth-quarter earnings edged up 2.6% as the telecommunications company recorded a lower income tax expense, but revenue fell for the sixth consecutive quarter.

For 2014, CenturyLink said it expects adjusted per-share earnings of $2.40 to $2.60 on operating revenue of $17.9 billion to $18.10 billion. Analysts polled by Thomson Reuters expected per-share earnings of $2.66 and revenue of $17.92 billion.

Meanwhile, for the first quarter, CenturyLink sees an adjusted profit of 58 cents to 63 cents a share on operating revenue of $4.46 billion to $4.51 billion. Analysts expected 68 cents a share and $4.46 billion in revenue.

Though the company has sought to add high-speed Internet subscribers, legacy businesses have been affected by access-line losses and lower access revenue. Sales at one point were bolstered by the 2011 acquisitions of Qwest Communications and Savvis, though revenue has now declined for six consecutive quarters as a result of lower legacy services revenue.

CenturyLink reported a profit of $239 million, or 41 cents a share, compared with a prior-year profit of $233 million, or 37 cents a share. Excluding impairment charges and adjusting for purchase accounting intangible and interest amortizations, adjusted profit rose to 68 cents a share from 67 cents a share.

Operating revenue edged down 0.9% to $4.54 billion. The drop was driven by lower legacy services revenues primarily due to the impact of access line losses and lower access revenues.

In November, the company projected a fourth-quarter adjusted profit of 55 cents to 60 cents a share on revenue of $ 4.5 billion to $4.55 billion.

The company's income tax expense narrowed in the current quarter to $91 million from $141 million a year earlier.

The company added about 26,000 Prism television subscribers during the quarter. CenturyLink ended the quarter with nearly 6 million high-speed Internet subscribers, an increase of about 49,000.

Shares slipped 1.3% to $29.80 in recent after-hours trading. Through Wednesday's close, the stock has fallen 28% in the last 12 months.

Write to Anna Prior at anna.prior@wsj.com

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