Why CenturyLink’s 3Q17 Earnings Missed Estimates



CenturyLink’s earnings trend

CenturyLink (CTL) is a wireline telecom company in the United States (SPY) that serves 10.5 million voice lines and 5.8 million broadband customers as of 3Q17. The declining trend in CenturyLink’s earnings continued during 3Q17. CenturyLink reported softer-than-expected revenues and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization), in addition to broadband subscriber losses in 3Q17.

In 3Q17, on an adjusted level, the company missed Wall Street analysts’ consensus earnings expectations. The company’s adjusted earnings per share (or EPS) of $0.42 in 3Q17 missed consensus estimates by ~6.7%.

The company’s adjusted EBITDA was $1.4 billion in 3Q17 as compared to $1.6 billion in 3Q16. Its adjusted EBITDA margin fell to 34.6% in 3Q17 from 36.4% in 3Q16.

Peer comparison

In 3Q17, Verizon’s (VZ) adjusted EPS fell ~3.0% year-over-year (or YoY) to reach $0.98 on the exclusion of one-time items. Meanwhile, AT&T’s (T) adjusted EPS remained flat YoY to reach $0.74 in 3Q17. However, Windstream’s (WIN) EPS improved to an EPS loss of $0.55 in 3Q17 from an EPS loss of $0.72 in 3Q16.

In the next part, we’ll look at CenturyLink’s revenue growth in 3Q17.

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