What happened

Shares of Lumen Technologies (LUMN 3.82%) have gotten crushed today, down as much as 10%, after the company reported fourth-quarter earnings. The results were mixed compared to market expectations, and Lumen also said it would be recognizing a non-cash goodwill impairment charge. As of 12:20 p.m. EST, shares were down 8%.

So what

Revenue in the fourth quarter was $5.13 billion, mostly on target with the $5.12 billion in sales analysts were expecting. That resulted in adjusted earnings per share of $0.48, which beat the consensus estimate of $0.30 per share in adjusted profits. The telecommunications company, which operates under the CenturyLink brand, lost approximately 19,000 consumer broadband subscribers during the quarter.

Red stock chart going down

Image source: Getty Images.

"We made significant transformational progress in 2020, launching the Lumen platform to support our customers' application and data needs for the 4th Industrial Revolution," CEO Jeff Storey said in a statement. "We invested in our Edge Cloud capabilities, enhanced our customers' digital experiences, and launched new platform-based solutions."

Now what

Following an annual goodwill impairment analysis, Lumen determined that the fair value of its reporting units was less than the carrying value. The company factored in its weighted average cost of capital, market multiples, and internal forecasts and recorded a $2.6 billion charge. Lumen is also revamping its reporting structure to align with operational changes starting next quarter.

Outlook for 2021 calls for adjusted EBITDA of $8.4 billion to $8.6 billion, with free cash flow of $2.8 billion to $3 billion.