CenturyLink’s core revenue in 1Q16 and 2Q16
In the previous part of this series, we saw that CenturyLink’s (CTL) revenue declined ~1.1% YoY (year-over-year) to ~$4.4 billion in 1Q16. The declining trend in CenturyLink’s core revenue continued during the quarter. It decreased ~1.9% YoY to ~$4.0 billion. In 2Q16, the company expects to have core revenue of $3.9 billion–$4.0 billion.
CenturyLink’s strategic services continued to grow in 1Q16. Meanwhile, its legacy revenue continued to shrink. The carrier’s strategic revenue increased ~1.5% YoY to ~$2.4 billion in 1Q16. Its legacy revenue declined ~6.4% YoY to ~$1.6 billion.
Growth drivers within strategic services
In 1Q16, business high-bandwidth data services and consumer high-speed Internet components continued to drive strategic services revenue growth. Revenue from business high-bandwidth data services increased ~7.4% YoY to reach ~$0.74 billion.
Meanwhile, CenturyLink’s consumer high-speed Internet component generated ~$0.67 billion of revenue, a YoY growth of ~5% for the quarter.
In the 1Q16 conference call, Stewart Ewing, CenturyLink’s CFO (chief financial officer), said the company “added approximately 16,900 Prism TV customers, while high-speed internet customers increased nearly 7,800 during the quarter.” At the end of 1Q16, the company had ~6.1 million high-speed Internet customers and ~0.3 million Prism TV subscribers.
For a diversified exposure to select US wireline telecom companies, you can consider investing in the First Trust Utilities AlphaDEX ETF (FXU). FXU held a total of ~19.9% in AT&T (T), Verizon (VZ), Level 3 Communications (LVLT), CenturyLink (CTL), and Frontier Communications (FTR) at the end of April 2016.
In the next part, we’ll see when CenturyLink’s data center transaction might be finalized.