What happened
Struggling telecom and tech company Lumen Technologies (LUMN -6.20%) couldn't get over the hump of Hump Day. The company's share price took a more than 2% hit on Wednesday after first-quarter results were announced; by contrast the S&P 500 index slipped by a relatively modest 0.7%.
So what
For its first quarter, Lumen booked total revenue of just over $3.7 billion, a comedown from the nearly $4.7 billion it earned in the same period of 2022. Non-GAAP (generally accepted accounting principles) adjusted net income fell even more precipitously, diving to $97 million ($0.10 per share) from the year-ago tally of $636 million. As for free cash flow (FCF), it plunged into negative territory at $75 million, against first-quarter 2022's $846 million surplus.
While revenue was broadly in line with analyst estimates, net income missed on the consensus. Collectively, those prognosticators were expecting adjusted profitability to reach $0.14 per share.
Lumen continues to struggle with a legacy telecom business in an age of wireless. While it's ramped up its efforts in next-generation offerings, competition is tough in this arena.
It attempted to put a positive spin on its latest numbers, quoting CEO Kate Johnson as saying, "We are early in our turnaround at Lumen, but we are already seeing positive leading indicators as we execute on our core priorities and new mission to digitally connect people, data, and applications -- quickly, securely, and effortlessly."
Now what
Lumen also largely reiterated its guidance for the entirety of 2023. Among the selected metrics were adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which is expected to land at $4.6 billion to $4.8 billion; cash flow (anticipated to be $0 to $200 million); and capital expenditures ($2.9 billion to $3.1 billion). The company did not provide net income or revenue projections.
