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What Are CenturyLink’s Major Long-Term Growth Drivers?

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Part 5
What Are CenturyLink’s Major Long-Term Growth Drivers? PART 5 OF 9

What CenturyLink’s Earnings Trend Indicates

CenturyLink’s EBITDA margin over the past few quarters

In this article, let’s look at CenturyLink’s (CTL) adjusted EBITDA.1 The decreasing trend in CenturyLink’s adjusted EBITDA continued during 2Q17.

CenturyLink’s adjusted EBITDA was $1.4 billion in 2Q17 compared to $1.6 billion in 2Q16. CenturyLink reported an adjusted EBITDA margin of 35.3% in 2Q17, down from 37.5% in 2Q16. This decrease in adjusted EBITDA is primarily due to revenue declines that were offset by a reduction in operating expenses. This reduction was driven by a decline in cash expenses and lower depreciation and amortization expenses.

What CenturyLink’s Earnings Trend Indicates

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Peer comparison of EBITDA margins in 2Q17

Verizon (VZ) reported a consolidated adjusted EBITDA margin of 37.2% in 2Q17. Windstream’s (WIN) adjusted OIBDA (operating income before depreciation and amortization) margin was 22.6% in 2Q17.

AT&T’s (T) combined domestic wireless operations’ EBITDA margin was 41.8% in 2Q17, and Frontier Communications (FTR) reported an adjusted EBITDA margin of 39.3% in 2Q17.

CenturyLink’s management expects its adjusted EBITDA could range from ~$1.4 billion to ~$1.5 billion in 3Q17. This forecast is due to an expected decline in revenues being offset by lower operating expenses, which are associated with lower personnel numbers and efficiently managing its network and facility costs.

  1. earnings before interest, tax, depreciation, and amortization
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