CenturyLink Profit, Revenue Drop in Q4

CenturyLink on Wednesday reported an 88 percent decrease in profit for its fourth quarter compared to the same quarter in 2015, along with a 4 percent drop in operating revenue.

Total operating revenues in the fourth quarter were $4.3 billion compared to $4.47 billion for the year-ago quarter. Profit was $42 million compared to $338 million.

Some of the profit slip is due to severance costs related to layoffs and expenses associated with the pending Level 3 acquisition. The $34 billion merger is anticipated to close on Sept. 30.

For the full year, CenturyLink reported $17.5 billion in operating revenue, compared to $18 billion for 2015, and $626 million in profit, compared to $878 million.

“CenturyLink achieved significant progress on our operational initiatives in 2016; however, full-year 2016 operating revenues and cash flows were below our expectations, primarily due to lower strategic revenue growth,” said Glen F. Post III, CenturyLink’s CEO and president. “We are not satisfied with these results and are making progress in a number of areas focused on continuing to improve our customer experience and further positioning CenturyLink for long-term growth.”{ad}

Business segment revenue was $2.55 billion in the fourth quarter, down 4.1 percent from the year-ago quarter, primarily due to a decline in legacy revenue, which was partially offset by 3 percent growth in high-bandwidth data revenue. Strategic revenue was $1.23 billion in the quarter, up 1.1 percent from the year-ago quarter.

Consumer segment revenues were $1.45 billion, down 4.3 percent from the year ago quarter, primarily due to a decline in legacy voice revenue, which was partially offset by growth in Prism TV revenues. Strategic revenues totaled $784 million in the quarter, up 1.4 percent from the year-ago quarter.

“We saw continued improvement in our broadband customer trend during the second half of 2016 and achieved modest consumer broadband customer growth in the fourth quarter,” Post said. “We also continued to enhance the broadband speeds across our network and achieved nearly 5 percent year-over-year growth in business high-bandwidth data services revenue in the second half of 2016. Additionally, we recently realigned our organization into primary customer facing units enabling faster decision making and market responsiveness, increased accountability and an enhanced customer experience.”

CenturyLink’s pending acquisition of Level 3, and pending sale of its data centers and associated colocation business “align with our network-first focus while enhancing our opportunities to deliver complementary hosting, cloud and managed services,” he said.