What happened

Shares of telecommunications service provider CenturyLink (NYSE:CTL) plummeted in Thursday trading -- down 12.1% as of 2:30 p.m. EST -- after the company reported fourth-quarter and full-year earnings last night.

On the one hand, CenturyLink's results weren't all that bad. Sales of $5.78 billion missed expectations by about $20 million, but pro forma earnings of $0.37 per share beat analyst estimates by a penny.

Broken eggs on floor.

CenturyLink just dropped its dividend by half, and it's made a terrible mess. Image source: Getty Images.

So what

Viewed from another perspective, however, CenturyLink's results were just awful. Calculated according to GAAP accounting standards, CenturyLink lost $2.26 per share for the quarter, wiping out all profit earned earlier in the year and leaving CenturyLink with a $1.63-per-share loss for the year.

Of course, the worst news of all (from shareholders' perspective) came in this line from the earnings statement: CenturyLink is "reducing annual dividend to $1.00 from $2.16 per share."

That's right. You read that right: CenturyLink cut its dividend by more than half.

Check out the latest CenturyLink earnings call transcript.

Now what

Granted, that was probably to be expected. At $2.16 per share, CenturyLink was paying a dividend worth nearly 15% of its own market cap -- every year. Dividends that high aren't usually sustainable. Nonetheless, CenturyLink CFO Neel Dev had just finished telling investors three months ago that management was still "comfortable" paying that dividend.

It's comfortable no longer -- and judging from today's market reaction, dividend investors are no longer comfortable owning CenturyLink stock.