What happened
Shares of Lumen Technologies (LUMN), a telecommunications company, were tumbling this morning after it reported its second-quarter results. Investors were concerned about the company's massive $8.74 billion loss in the quarter, a steep drop from the gain of $344 million in the year-ago quarter.
The tech company's share price was down by 14.2% as of 11:42 a.m. ET.
So what
Many Lumen investors had already headed for the exits this year, and the company's latest financial results convinced more of them to look for the doors. Today's investor bolt stems from Lumen's noncash goodwill impairment charge of $8.79 billion for the quarter.
The company said in a press release, "The sustained decline in our share price during the second quarter was considered a triggering event requiring evaluation of goodwill impairment."
Investors weren't happy with that decision, and the company's revenue drop in the quarter didn't do much to bolster their optimism. Sales fell by nearly 22% from the year-ago quarter to $3.6 billion, which just missed analysts' consensus estimate of $3.7 billion.
Unsurprisingly, Lumen's second-quarter cash flow was also a disappointment. Cash flow was a loss of $896 million, down from positive cash flow of $668 in the second quarter of 2022.
Now what
There's a lot of work to be done for Lumen to turn profitable. The company's long-term debt is $19.9 billion, and while that number is down from $20.4 billion in the year-ago quarter, it's still a huge sum for the company as it tries to restore revenue growth.
Over the past year, Lumen's share price has plunged nearly 85%, and its second-quarter results didn't offer investors much hope. Be cautious with this stock right now as the company tries to find its footing, and if you are bullish that it can turn revenue and earnings around, it still would pay to wait to see better quarterly results before making that call.
