Understanding CenturyLink’s Core Revenue in 2Q17



CenturyLink’s core revenue in 2Q17

Core revenue refers to all strategic revenues, including legacy revenue streams but excluding data integration. CenturyLink’s (CTL) management anticipates that it will see core revenues between $3.66 billion and $3.72 billion for 2Q17.

In 1Q17, CenturyLink reported total core revenues of $3.8 billion, which was a ~4.4% reduction YoY (year-over-year). The primary reason for this decline in core revenues was subscriber losses and migration away from low-bandwidth data services and legacy voice.

In 1Q17, CenturyLink’s strategic services continued to expand, whereas its legacy revenue continued to shrink. The company’s strategic revenue grew ~0.6% YoY to reach $2.0 billion in 1Q17, but its legacy revenue fell ~9.3% YoY to reach $1.8 billion.

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Growth drivers within strategic services

In 1Q17, high-bandwidth data services continued to drive strategic services revenue growth. Revenue from high-bandwidth data services rose ~4.2% YoY to reach $0.77 billion.

Meanwhile, CenturyLink’s acquisition of Level 3 should give an immediate boost to 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 the likes of Verizon Communications (VZ) and AT&T (T). Notably, in an effort to bolster its infrastructure, CenturyLink has also purchased landline assets from Sprint (S) for $6 billion.


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