CenturyLink (CTL, Financial) is an integrated telecommunications company in the United States that operates through four segments -- Consumer, Business, Wholesale, and Data Hosting. The company posted an estimate beating third-quarter results earlier this month.
A look at the improvements
Quarterly revenue, though flat year after year, came in at $4.514 billion and surpassed the consensus estimates by around $9 million. The estimate beating top-line performance was on the back of solid contributions from broadband, Prism TV, data and hosting services which partially offset access line losses.Â
The operating expenses decreased around 25% and operating income came in at $619 million versus operating loss of $685 million in last year's quarter. Adjusted earnings per share came in at $0.63. Analysts were expecting it to be a cent lower. GAAP net income came in at $0.33 per share against a loss of $1.76 per share in the year-ago quarter.
The results demonstrated that the company is executing well against its objectives and also making investments to drive long-term growth. At the same time, CenturLink offered value to shareholders as it repurchased 1.7 million shares of common stocks in the third quarter of 2014. The company also declared a quarterly cash dividend of $0.54 per share.
Improving infrastructure
The company added around 1,200 fiber builds in the quarter and remains on track to exit the fiscal year with approximately 2,500 fiber builds. As at the end of the third quarter CenturyLink has around 21,000 fiber connected towers.
In the Prism TV market, the company continues to invest in order to expand its customer base and drive growth going forward. CenturyLink has added more than 240,000 consumers year-to-date and is on track to exit the fiscal 2014 with a subscriber base of 300,000. Going forward, it has plans to expand the Prism TV to newer markets in 2015, but there are no specific plans disclosed.
With the rollout of the company’s global managed hosting services in China, CenturyLink positions itself for serving multinational corporations in the second largest economy of the world. The company also launched CenturyLinks private cloud service, which positions it to capture the future growth of enterprise IT workload as they move to cloud services. During the quarter, the data and managed hosting revenues grew 5.6% year-over-year.
The company is seeing a strong demand in the high bandwidth data services. It announced expansion of its 1 Gig services to business customers in 16 markets, thus driving strong small and mid-size business sales. As a result of this the addressable market expanded and this will be a growth driver going forward.
The strength of the company in the 100GbE Optical Wavelength Service is evident from the fact that it has more than 150 U.S. Department of Defense locations through a contract, financial institutions, internet content providers and enterprise customers through a dedicated network connection.
Moreover, CenturyLink along with Infinera, delivered one terabit per second (1 Tb/s) of super-channel transmission capacity to support the SCinet network at the International Conference between Nov. 17-21 in New Orleans.
Going forward, for the fourth quarter the company expects the adjusted earnings to be in the range of $.059-$0.64 per share. The revenue for the fourth quarter is expected to be in the range of $4.44 billion -$4.49 billion.
Â
