The 10-second takeaway
For the quarter ended June 30 (Q2), CenturyLink met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share contracted significantly.
Margins shrank across the board.
CenturyLink reported revenue of $4.61 billion. The 17 analysts polled by S&P Capital IQ anticipated a top line of $4.57 billion on the same basis. GAAP reported sales were 4.7% higher than the prior-year quarter's $4.41 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.65. The 20 earnings estimates compiled by S&P Capital IQ predicted $0.61 per share. GAAP EPS of $0.12 for Q2 were 37% lower than the prior-year quarter's $0.19 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 58.5%, 100 basis points worse than the prior-year quarter. Operating margin was 14.2%, 270 basis points worse than the prior-year quarter. Net margin was 1.6%, 100 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $4.56 billion. On the bottom line, the average EPS estimate is $0.60.
Next year's average estimate for revenue is $18.31 billion. The average EPS estimate is $2.49.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 522 members out of 566 rating the stock outperform, and 44 members rating it underperform. Among 167 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 151 give CenturyLink a green thumbs-up, and 16 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CenturyLink is outperform, with an average price target of $43.74.
Can your portfolio provide you with enough income to last through retirement? You'll need more than CenturyLink. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.
- Add CenturyLink to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Why Mega-Yielding CenturyLink, Inc. Crashed 30% in 2017
Could shares of CenturyLink be a great buy for dividend-hungry investors, or is another horrible year in store?
What to Expect from CenturyLink, Inc. in 2018
Are brighter days ahead for the struggling telecom company?
Is 5G the Key to CenturyLink's Turnaround?
Focus on the fiber, not the copper, says one analyst.