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How Is CenturyLink Positioned in 2018?

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CenturyLink’s falling revenues in Q1 2018

CenturyLink (CTL) reported total operating revenues of $5.9 billion in the first quarter, which was an ~1.7% YoY (year-over-year) fall from revenues of $6.1 billion in the first quarter of 2017 on a pro forma basis.

CTL’s adjusted net income rose ~77.0% YoY to $262.0 million in the first quarter, up from $148.0 million in the first quarter of 2017 on a pro forma basis. Its adjusted EPS rose ~78.6% YoY to $0.25 in the first quarter, up from $0.14 in the first quarter of 2017.

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Key points from CenturyLink’s outlook

During CenturyLink’s (CTL) first-quarter earnings conference call on May 9, its management provided guidance for fiscal 2018. The company expects its adjusted EBITDA to be ~$8.8 billion–$9.0 billion.

The company’s free cash flow (or FCF) is expected to come in at ~$3.2 billion–$3.4 billion. CTL intends to continue paying dividends in 2018 by explicitly guiding to $2.3 billion in dividend payments.

Wall Street analysts expect the company’s earnings to increase for fiscal 2018. Analysts expect CenturyLink to report EPS of $1.04 in 2018, compared to EPS of $0.63 in 2017 on a pro forma basis.

CenturyLink’s competitors

In addition to traditional competitors AT&T (T) and Verizon (VZ), Comcast (CMCSA), Frontier Communications (FTR), and other cable companies are increasing their presence in the business services market. However, a combined CenturyLink/Level 3 company would be more resilient in the face of this competition. CenturyLink completed its acquisition of Level 3 in November 2017.

Frontier Communications’ revenues fell ~6.7% YoY to reach $2.2 billion in the first quarter. Verizon’s Wireline segment revenues fell ~1.6% YoY to reach $7.6 billion in the first quarter.

Check out all the data we have added to our quote pages. Now you can get a valuation snapshot, earnings and revenue estimates, and historical data as well as dividend info. Take a look!

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