Shares of network giant Lumen Technologies (LUMN -16.52%) plunged 19.4% on Friday as of 12:10 p.m. ET.

The fiber broadband network giant fell after reporting second-quarter earnings last night, which technically beat expectations on the bottom line, but still resulted in an adjusted non-GAAP (generally accepted accounting principles) loss.

Yet revenue fell short of expectations, indicating investors may have to be more patient to realize the company's turnaround efforts, if they happen at all.

Lumen's results show investors have to wait some more

In the quarter, Lumen saw revenue decline 5.4% to $3.09 billion, while adjusted net loss per share came in at $0.03. The adjusted EPS number actually improved from $0.13 and beat expectations. However, the improved losses seem to be from cost-cutting, which doesn't exactly inspire confidence.

On that note, Lumen also increased its 2025 guidance for free cash flow by $500 million at the $1.3 billion midpoint, but $400 million of that increase is from a one-time tax benefit due to changes in tax law, with the remainder coming from capital expenditures, now forecast to be at the lower end of the guided range.

And Lumen is still in "shrink to eventually grow" mode, announcing it had agreed to sell 95% of its consumer fiber-to-the-home business to AT&T, which will result in Lumen returning to a nearly 100% enterprise-focused model.

Servers with Ethernet wires coming out.

Image source: Getty Images.

The company's remaining enterprise businesses are a mixed bag

Looking at the enterprise portion of the business, Lumen divides products and services into three categories: "Grow," which is future-looking products behind which the company is investing; "Nurture," which is products that may not have above-market growth, but are still useful for customers; and "Harvest," which are no-growth or declining products that the company is harvesting for cash.

In the quarter, the "Grow" segment, making up 48% of enterprise revenue, was up 8.5% year over year, and the "Harvest" segment actually grew 2.1%, surprisingly. However, the "Nurture" segment, which is supposed to have a growth cadence in the middle of the two, declined 18%.

That's a strange phenomenon, and may be leading to a lack of confidence that Lumen can return to overall growth on the timeline it expected. Time is of the essence, as the company had total debt of $18.3 billion as of June 30, or 4.9 times the company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Lumen plans to pay down another $4.8 billion from the AT&T deal, resulting in 3.9 times leverage.

However, that's still a heavy debt ratio for a company with revenue declines. While there were some green shoots in Lumen's quarter, a decisive turnaround appears to be a ways off.