CenturyLink’s core revenue in 4Q16
In the previous part of this series, we saw that CenturyLink’s (CTL) total operating revenue fell ~4.2% YoY (year-over-year) to $4.3 billion in 4Q16. The falling trend in CenturyLink’s core revenue continued during the quarter. “Core revenue” refers to all strategic and legacy services revenue streams—excluding data integration and other. It fell ~4.1% YoY to $3.9 billion in 4Q16. In 1Q17, the company expects to have core revenue of $3.80 billion–$3.86 billion.
CenturyLink’s strategic services continued to grow in 4Q16. Meanwhile, its legacy revenue continued to shrink. The carrier’s strategic revenue rose ~1.2% YoY to $2.0 billion in 4Q16. However, its legacy revenue fell ~9.3% YoY to $1.8 billion.
Growth drivers within strategic services
In 4Q16, the business high-bandwidth data services component continued to drive strategic services’ revenue growth. Revenue from business high-bandwidth data services rose ~3.0% YoY to $0.75 billion.
CenturyLink’s acquisition of Level 3 (LVLT) should boost its top line. While Level 3 boasts one of the world’s largest Internet backbones, CenturyLink has been upgrading its network infrastructure to compete with AT&T (T) and Verizon (VZ). In an effort to bolster its infrastructure, CenturyLink acquired landline assets from Sprint (S) for $6 billion.