MPLS, Ethernet Sales Help CenturyLink Increase Profit

CenturyLink on Wednesday reported a 23 percent hike in profit for its first quarter compared to the same quarter in 2015, but a slight decrease in operating revenue.

Total revenue in the first quarter was $4.4 billion, compared to $4.45 billion for the year-ago quarter and below analysts’ estimate of $4.43 billion. Profit was $236 million, compared to $192 million a year ago.

“CenturyLink achieved another solid quarter, with core revenues, operating cash flow and adjusted diluted earnings per share in-line with our previous guidance,” said Glen F. Post III, CenturyLink’s CEO and president. “Additionally, since the first of the year, we have completed two debt issuances totaling more than $1.2 billion, which strengthens our ability to invest in our business while returning cash to shareholders.”{ad}

Business segment revenue was $2.6 billion in the first quarter, a 3.4 percent decrease from the same quarter in 2015, primarily due to declines in legacy services, low-bandwidth data services and data integration revenues, which were partially offset by growth in high-bandwidth data service revenue.

Consumer segment revenue was $1.49 billion for the first quarter, a .5 percent decrease from first quarter 2015.

First-quarter revenue from high-bandwidth data services provided to business customers, including MPLS and Ethernet, increased more than 7 percent year-over-year, while strategic revenue was flat year-over-year primarily due to increased high-bandwidth data services revenue offset by continued declines in low-bandwidth data services and hosting revenue.

During the quarter, CenturyLink added more than 16,900 Prism TV customers and about 7,800 high-speed Internet customers.

Declines in voice and long distance revenues, low-bandwidth data services revenue and data-integration revenue were partially offset by increases in business high-bandwidth data services revenue, consumer high-speed Internet and Prism TV revenues, and high-cost support revenue related to Connect America Fund Phase 2 (CAF Phase 2) support in the first quarter.

“We remain on track with our data centers and colocation business strategic alternatives process, and are pleased with the level of interest and progress to date,” Post said. “We continue to focus on leveraging our strategic asset portfolio and financial strength to execute on our operational initiatives and better serve our customers.”