CenturyLink (CTL) Q1 Earnings Top Estimates, Revenues Miss
Zacks Investment Research | May 09, 2018 09:36PM ET
CenturyLink, Inc. (NYSE:CTL) reported mixed financial results for the first quarter of 2018, the first full quarter of operations following the acquisition of Level 3.
Net Income
On a GAAP basis, net income for the reported quarter came in at $115 million or 11 cents per share compared with $163 million or 30 cents per share in the year-ago quarter. The year-over-year decrease in earnings despite higher revenues was primarily driven by higher operating expenses. The company’s adjusted earnings were 25 cents per share, which comfortably surpassed the Zacks Consensus Estimate of 15 cents.
Revenues
Total operating revenues increased 41% year over year to $5,945 million, due to incremental revenues from Level 3. The top line, however, missed the Zacks Consensus Estimate of $5,963 million.
Operating Metrics
Quarterly operating expenses totaled $5,195 million, up 45% year over year. Operating income improved 19% to $750 million. Operating income margin was 12.6% compared with 15% in the year-ago quarter. Adjusted EBITDA decreased to $2,074 million from $2,140 million in the year-ago quarter, due to an increase in payroll taxes and integration-related expenses. Adjusted EBITDA margin was 34.9% compared with 35.4% in the prior-year quarter.
As of Jan 1, 2018, the company adopted the new revenue recognition standard, ASC 606. Overall, the adoption of this new standard negatively affected total revenues by approximately $15 million in the quarter, with $5 million in Business and $10 million in Consumer.
CenturyLink, Inc. Price, Consensus and EPS Surprise
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