2019 hasn't been the greatest of years for CenturyLink (NYSE:CTL). The communications company's stock is down 9% year to date as of this writing as sales continue to decline, and a dividend cut after 2018 results were reported didn't get things off to a good start either. As for a long-awaited rebound, not much changed during the third quarter.

Nevertheless, things could be a lot worse, and the new dividend payment (currently yielding 7.7%) is manageable. As far as income stocks go, CenturyLink is doing just fine for the time being.

The updated numbers

CenturyLink's revenues were $5.61 billion in Q3, a 4% decline year over year. The flagging consumer business and other legacy products like landline, old internet connection service, and cable TV led the declines. However, sales were up 1% sequentially from the second quarter as the company's investments in its enterprise solutions segment yielded results (more on that in a minute). Enterprise, now CenturyLink's largest reportable segment, grew 3% year over year and quarter over quarter to $1.55 billion.

The back of an internet modem with an ethernet cable plugged into it.

Image source: Getty Images.

The other good news is that expenses continue to decline more than revenue does. Selling, general, and administrative costs were cut 14% in the quarter, leading to a 6% year-over-year increase in operating-level income of $950 million. Through three-quarters of 2019, operating income is $2.93 billion when excluding a noncash impairment charge of $6.51 billion taken during the first quarter, compared with operating income of $2.41 billion in 2018.

Metric

Nine Months Ended Sept. 30, 2019

Nine Months Ended Sept. 30, 2018

Change

Revenue

$16.8 billion

$17.7 billion

(5%)

Cost of services and products

$7.56 billion

$8.21 billion

(8%)

SG&A expenses

$2.72 billion

$3.19 billion

(15%)

SG&A = selling, general, and administrative. Data source: CenturyLink.

Sales aren't great, but profits are in good shape

All of this is to say that although declining revenues are nothing to write home about, investors can take solace in the fact that the bottom line is on solid footing. There is plenty of room for the company to pay off debt, maintain the paycheck to shareholders, and invest in areas of growth.

CEO Jeff Storey said on the quarterly conference call that CenturyLink will "grow where it invests," specifically in enterprise and high-speed fiber-optic internet. Some examples cited within its enterprise segment were its Dynamic Connections product, through which customers can manage their links to various cloud infrastructures. Another is the rollout of new edge computing servers that management announced during the second quarter, and new deals are already being inked for those.

Storey also reiterated that he believes fiber is the long-term winner over wireless -- obviously, as wireless internet is outside of CenturyLink's wheelhouse. Ignoring the bias, though, fiber-based internet is still the fastest and most reliable technology around, and even new 5G wireless networks are only good for the last couple thousand feet or less to the end customer. Behind the scenes is high-speed fiber, and CenturyLink thinks its global fiber network is more important than ever before.

The wireless-versus-wired debate can be saved for another time, though. Strong cash generation has given CenturyLink the room to make some capital investments this year, and even with the increased outflow, the dividend payments are handily covered by free cash flow (money left after cash operating and capital expenses are paid).

Metric

Nine Months Ended Sept. 30, 2019

Nine Months Ended Sept. 30, 2018

Change

Capital expenditures

$2.69 billion

$2.26 billion

19%

Free cash flow

$2.08 billion

$2.78 billion

(25%)

Dividend payments

$829 million

$1.74 billion

(52%)

SG&A = selling, general, and administrative. Data source: CenturyLink.

Things could certainly be better, but they could be a lot worse, too. CenturyLink is likely a ways off from reigniting growth -- at least until it figures out what it wants to do with the underperforming consumer business -- but those in it for that 7.7% yield can rest easy for now.