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CenturyLink: This Telecom Equipment Company Is a Solid Investment

July 27, 2014 | About:

Telecom operator Centurylink (NYSE:CTL) has been doing great in 2014 and it seems that the organization isn't going to stop whenever soon. The organization's stock has picked up almost 15% this year and could go higher if Centurylink's late first-quarter results are an evidence. The organization seems to be doing great despite rivalry from Frontier Communications (FTR) and Windstream (WIN) . How about we see why Centurylink is poised to convey stronger gains even with stiff rivalry.

Strong moves in key areas

Centurylink reported great first-quarter results determined by strong interest for high-transmission capacity information services, fast Internet, and Prism TV services. The organization also reported a solid change in the rate of decline of its legacy revenue. As a result, Centurylink attained center revenue of $4.11 billion in the first quarter, about level from last year. This was a finer performance considering a 2% year-over-year decline in the year-prior quarter, illustrating its proceeded with progress to revenue stability.

Centurylink is seeing an increase sought after from business customers for its solutions that help. The organization's overseen office item suite dispatch, alongside multi-site MPLS item sales, are going strong. Centurylink is also progressing great on the incorporation of its Tier 3 acquisition, including new cloud nodes in two Centurylink server farms in the first quarter. Going ahead, it remains on track to include these nodes in four extra Centurylink server farms by the year's end.

Level 3's cloud infrastructure engineering is relied upon to significantly strengthen Centurylink's capabilities to take care of the developing demand for exceedingly computerized cloud and oversaw services. It is also seeing great development in Ethernet services from its fiber-to-the-tower investments and the wholesale business, which are needed by wireless carriers for their information backhaul needs.

Also, Centurylink has attained year over year revenue development for the last seven quarters in its consolidated business and hosting segment. Determined by proceeded with strength in fast Internet and Prism TV customer development, alongside value increases and enhanced beat, Centurylink's consumer revenue developed sequentially at the end of the day.

Strategies that could drive development

Looking ahead, Centurylink is focusing on transforming itself from a supplier of conventional system communications to an incorporated supplier of IP, improved system, cloud hosting and IT services. So, it is refining its focus and executing on various strategic fronts.

Throughout the last few years, Centurylink has made significant investments in its capacity to give system and hosting services to its business customers.

As specified prior, Centurylink is witnessing strong early sales from its late dispatch of Managed Office, a solution that integrates system, Voip, email, and other key business applications. Going ahead, Centurylink believes that it has a decent chance to develop its business customer base with this service given the amount of features it has stuffed into the solution.

Moreover, the organization will also be stretching its GPON and fiber sending to business buildings, prompting an increase in addressable business sector opportunities. Centurylink is attempting to convey fast Ethernet quality speeds to its customers, permitting them to cloud-empower their businesses. The organization has got a decent open door going ahead as businesses move to the cloud.

Centurylink's investments in products like high velocity Internet, high data transfer capacity information services, Prism TV, and oversaw hosting services are driving its development. The organization saw robust customer development in the first quarter, including more or less 66,000 rapid Internet customers and 24,000 Prism TV customers. Besides, it continues to expect more HSI customer additions in the second a large portion of the year.

Where does the opposition stand?

While it is clear that Centurylink is moving along pleasantly on the once again of its solutions and expansion moves, investors shouldn't disregard the potential risk that the likes of Windstream and Frontier present. Centurylink is focusing on stretching its suite of cloud solutions going ahead, however at the same time, even Windstream is also conveying server farms to support its own particular cloud-based services. Windstream expects to include 75,000 broadband customers this year, while Centurylink lost 120,000 telephone access lines in the previous quarter.

Then again, Frontier aggressively moving into new geographies. Its buyout of At&t's Connecticut business for $2 billion in December 2013 stretched its operations by a huge margin. Wilderness picked up 415,000 information, 900,000 voice, and 180,000 feature residential connections from At&t. This is unquestionably an alternate companion that Centurylink needs to be cautious about.


Centurylink has been doing great as it is focusing on new products to drive its development. The organization included a decent number of customers in key businesses last quarter, relieving the impact of the loss of telephone access lines. Looking ahead, Centurylink should keep performing admirably, so investors should unquestionably consider the organization's stock for their portfolio.

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