Image source: Getty Images.

What happened

Shares of CenturyLink (NYSE:CTL) dropped 11.6% in August, according to data from S&P Global Market Intelligence. The month started with a solid second-quarter report, but the regional telecom followed up with disappointing next-quarter guidance. The stock promptly started falling, and never reversed course.

So what

CenturyLink's second-quarter earnings came in 5% above Wall Street's consensus estimate, and revenue was in line with expectations. Looking ahead, management's earnings guidance for the third quarter stopped roughly 12% short of analysts' then-current projections.

CTL Chart

CTL data by YCharts.

Now what

CEO Glen Post said that the second quarter was a "solid" effort, thanks to tight cost controls and strong demand for high-end business data services. On the downside, legacy revenue from slower, copper-based connections is shrinking quickly. The end result of this balancing act is a combination of solid profit margins but stagnant sales.

This is a common story in today's telecom industry. CenturyLink's picture is simply changing a bit faster than many of its rivals', because the company is also doubling down on business-grade services at the expense of consumer-level sales.

CenturyLink investors have seen a 13% return in 2016, which is about double the year-to-date gains of the S&P 500, the market's barometer. But the stock is hardly expensive, even so.

The stock's enterprise value currently sits at 5 times trailing EBITDA profits, which is low for the industry at large. At the same time, CenturyLink offers a generous 7.7% dividend yield at today's prices. Patient and risk-tolerant investors might want to lock in that juicy dividend yield before the company's business-oriented focus starts to pay off.

Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.