What happened

Network solutions provider Lumen Technologies (LUMN -0.76%) had a terrible February, despite an earnings report early in the month that seemed to hit all the right notes. The stock fell 35.2% last month, according to data from S&P Global Market Intelligence.

So what

At first glance, the fourth-quarter report looked pretty good. The analyst consensus had called for earnings of roughly $0.19 per share on revenue near $3.78 billion. Instead, the company saw $0.43 of bottom-line earnings per share and a sales haul of $3.80 billion.

But investors shrugged off the better-than-decent results in light of gloomy guidance and downbeat management comments. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) are expected to drop roughly 30% next year, while free cash flow should land near the break-even point. Lumen's stock closed 20.8% lower that day and continued to trend downward through the rest of February.

Now what

Plunging share prices are nothing new for Lumen investors. The company formerly known as CenturyLink, Qwest Communications, and Level 3 Communications (among other predecessors) has been in full-fledged turnaround mode for nearly a full decade now.

Sales are down by 4% over the last 10 years, despite a top-line adrenaline shot from the Level 3 acquisition. Free cash flow is down by 42% over the same period. Lumen's investors absorbed a 91% negative return, or a milder 80% haircut when accounting for dividends and dividend reinvestments along the way.

Lumen crossed out its dividend policy last November. The dividend yield, which topped out at more than 17% last November, has been reduced to zero in order to conserve cash for other purposes.

Lumen is under new management led by ex-Microsoft and General Electric executive Kate Johnson. She is trying to reform the corporate culture and kick-start its stalled engines of innovation and growth. I wish her the best of luck, but the turnaround won't be quick and easy.

Meanwhile, the stock is priced as if Lumen's business was already halfway off the cliff. You can bet on this turnaround effort at the rock-bottom valuation of 3.6 times free cash flow, 0.2 times sales, and 0.3 times book value.

In other words, the market tenor suggests that Lumen's shareholders would be much better off if the company just liquidated its assets to fund one last mega-dividend instead of actually running the business.