What happened

Shares of regional telecom CenturyLink (NYSE:LUMN) rose as much as 11.8% on Thursday, lifted by a mixed third-quarter earnings report.

So what

CenturyLink's earnings increased from $0.30 to $0.31 per share, stopping short of Wall Street's consensus estimate of $0.33 per share. On the top line, revenues fell 4% to $5.61 billion. Your average Wall Street firm would have settled for $5.54 billion.

So revenues fell but still outperformed against the Street's estimates, while earnings increased but still disappointed analysts. That's a really good definition of "a mixed quarter."

A technician performs maintenance work on a large bundle of fiber-optic cables, standing outdoors next to what appears to be the base of a cell tower.

Image source: Getty Images.

Now what

The company enjoyed modest growth in the international and enterprise segments, balanced out by lower sales to consumers, small and medium businesses, and wholesale service customers. CenturyLink is balancing solid demand for its high-speed fiber network products while battling rapidly declining interest in legacy services such as voice-only phone lines and cable TV packages. This is the same old story you hear all across the telecom and cable sectors nowadays.

This stock is still trading 36% lower from a 52-week perspective, even after Thursday's sharp correction in a positive direction. CenturyLink trades at deeply discounted valuation ratios such as 10 times forward earnings and nine times free cash flows, while the lower share prices pushed the effective dividend yield all the way up to 7.5%.

I wouldn't touch that tempting dividend with a 10-foot fiber cable because it will be difficult for the mildly successful fiber products segment to overcome the downside from CenturyLink's fading legacy services. And there are so many better dividend payers available today that CenturyLink just doesn't seem to be worth the risk.