CenturyLink's Profit Falls, Level 3's Rises in Q3

CenturyLink, which completed its acquisition of Level 3 Communications last week, reported smaller profit and revenue for the third quarter compared to the same quarter of last year.

Profit was $92 million, compared to $152 million for the year-ago quarter, down 39 percent. Its operating revenue was $4 billion, down a bit from $4.4 billion in Q3 2016.

“Although below our expectations, CenturyLink’s third quarter 2017 high-bandwidth services revenue increased more than 5 percent on a normalized basis year-over-year,” said Glen Post III, CenturyLink’s CEO. “This, together with Level 3’s performance, reflects the continuing growth in demand for bandwidth and supports our belief that our increased scale and reach creates even greater potential for us to win in the marketplace.”

CenturyLink also released Level 3’s third-quarter earnings. Total revenue was flat at $2 billion, while profit was $157 million, up from $143 million for the year-ago quarter.

“Level 3 delivered a solid third quarter with continued margin expansion and strong free cash-flow generation,” said Jeff Storey, CenturyLink’s president and chief operating officer. “As a combined company, we are focused on executing against our integration plans, delivering a differentiated customer experience and driving profitable growth.”

CenturyLink’s enterprise segment revenue was $2.17 billion, down 11.2 percent from a year ago, primarily due to the revenue reduction associated with the colocation sale, as well as the decline in legacy revenue. Enterprise strategic revenue grew 4.2 percent and high-bandwidth data services revenue increased 5.5 percent year-over-year.

Consumer segment revenue was nearly $1.4 billion, down 5.8 percent from the year-ago quarter, primarily due to a decline in legacy voice revenue, as well as lower video revenue due to the restructuring of a satellite video contract in the first quarter of 2017.

“We’re excited to have completed the Level 3 acquisition last week,” Post said. “We believe this combination creates one of the world’s most powerful networks. Together, we have a compelling set of assets, the scale to compete globally and the opportunity to drive significant operational efficiencies.”