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

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Part 3
What Are CenturyLink’s Major Long-Term Growth Drivers? PART 3 OF 9

Why CenturyLink’s Revenues Fell in 2Q17

CenturyLink’s total operating revenues

In the previous part of this series, we noted that CenturyLink’s (CTL) earnings declined year-over-year (or YoY) during 2Q17. In this part, let’s look at CenturyLink’s performance in terms of its top line in the last few quarters. The decreasing trend in CenturyLink’s total operating revenues continued during 2Q17.

CenturyLink’s total operating revenues fell ~7.0% year-over-year to reach $4.1 billion in 2Q17. This decrease in its total operating revenues is mainly due to weak performance in strategic services, ongoing losses in legacy services, and the sale of the company’s data centers in May.

In 3Q17, the carrier anticipates generating total operating revenues between $4.06 billion and $4.12 billion. In 3Q16, the company reported revenues of $4.38 billion.

Why CenturyLink’s Revenues Fell in 2Q17

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Enterprise and Consumer Components segments’ revenues

In 2Q17, CenturyLink’s Enterprise and Consumer components were negatively impacted by higher losses in legacy services and weaker performance in strategic services. The growth trend in revenues from its Consumer segment has reversed since 2016. This revenue stream fell ~6.2% YoY to reach $1.4 billion in 2Q17.

Revenues for the Enterprise segment, CTL’s biggest revenue contributor, decreased YoY in 2Q17. This revenue stream fell ~9.0% YoY to $2.2 billion in 2Q17.

The Level 3 Communications acquisition deal could give CenturyLink significant scale in its Enterprise segment and could enhance the company’s ability to attain a stable top line.

Next, let’s examine the dynamics of CenturyLink’s core revenues in 2Q17.

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