Shares of CenturyLink (NYSE: CTL) gained 4.4% after the company reported second-quarter earnings of 34 cents per share, compared to 26 cents per share in the year-ago period. The Q2 bottom-line was also three cents higher than the street view.
The top line, meanwhile, declined 5.4% to $5.58 billion, and was slightly lower than analysts’ estimate of $5.59 billion.
CTL shares have declined 38% in the past 12 months and 25% in the year-to-date period.
CEO Jeff Storey said, “Along with our investments for growth, we remain focused on profitable revenue, while digitally transforming the company through improvement in customer experience and streamlining operations for employees.”
“These transformation efforts are paying off as we see ongoing improvement in bottom-line metrics, delivering another solid quarter of Adjusted EBITDA margin expansion and Free Cash Flow growth,” he added.
Free cash flow, excluding special items, was $956 million in Q2, an improvement over $919 million reported a year ago.
CenturyLink kept its outlook for fiscal 2019 unchanged. For this period, the company expects adjusted EBITDA in the range of $9.0 billion to $9.2 billion and free cash flow between $3.10 billion and $3.40 billion. Full-year capital expenditure is currently estimated at $3.50-$3.80 billion.
The integrated communications firm has been experiencing declines in revenue of late, derived from the sale of certain business products and services. It is also feared that deteriorating revenue and cash flows from operating activities may not be adequate to fund all of the cash requirements of the company.
The cash crunch had earlier this year forced the Monroe, Louisiana-based firm to slash its annual dividend payout from $2.16 to $1.00. However, this decision was not well received by the market, which sent the stock tumbling.
The company was also criticized by a major shareholder Southeastern Asset Management, saying CenturyLink should improve its balance sheet through asset sales, not through dividend cut.
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