correction: corrects FY13 outlook figures in last but one paragraph
Telecommunications company CenturyLink, Inc. (CTL) reported Wednesday a profit for the first quarter that surged 49 percent from last year, reflecting improved operating margins amid lower operating and interest expenses. Adjusted earnings per share topped analysts' expectations, while quarterly revenues matched their estimates.
The company also provided earnings and revenue guidance for the full-year 2013, in line with Street view, and raised earnings forecast for the full-year 2013, while maintaining annual revenue outlook.
"CenturyLink reported strong financial results and achieved solid broadband and Prism TV customer growth in the first quarter, while continuing to see good demand from businesses for high-bandwidth network and data hosting services," President and CEO Glen Post III said in a statement.
The Monroe, Louisiana-based reported net income of $298 million or $0.48 per share for the first quarter, higher than $200 million or $0.32 per share in the prior-year quarter.
Excluding special items, adjusted net income for the quarter was $303 million or $0.49 per share, compared to $243 million or $0.39 per share in the year-ago quarter.
Further, excluding purchase accounting intangible and interest amortizations related to acquisitions of Embarq, Qwest and Savvis, adjusted net income was $475 million or $0.76 per share, compared to $423 million or $0.68 per share last year.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.69 per share for the quarter. Analysts' estimates typically exclude special items.
Operating revenues for quarter declined 2.1 percent to $4.51 billion from $4.61 billion in the same quarter last year, but matched fifteen Wall Street analysts' consensus estimate of $4.51 billion.
Strategic revenues for the quarter grew 4.1 percent to $2.14 billion, while legacy revenues declined 7.8 percent to $1.97 billion from the prior-year quarter. Data integration revenues also decreased 3.4 percent to $140 million from a year ago.
Operating margin for the quarter improved 310 basis points to 17.3 percent, and adjusted operating margin expanded 190 basis points to 16.1 percent from last year.
The company ended the first quarter with about 5.92 million high-speed Internet subscribers, adding more than 66,700 customers in the quarter. The company also added 13,400 CenturyLink Prism TV subscribers in first quarter, ending the quarter with nearly 120,000 subscribers in service.
The company implemented the organizational realignment announced in early January focused primarily on strengthening our go-to-market strategy and service delivery process for business customers.
The realignment has already seen the achievement of annualized operating expense synergy run rate of $550 million from the Qwest integration as of the end of the quarter, and is on track to reach a $600 million annual run rate by the end of this year.
Looking forward to the second quarter, the company expects adjusted earnings in a range of $0.63 to $0.68 per share, and projected operating revenues between $4.49 billion and $4.54 billion. Analysts currently expect earnings of $0.66 per share on revenues of $4.54 billion for the quarter.
For fiscal 2013, CenturyLink raised its adjusted earnings guidance to a range of $2.60 to $2.75 per share from the prior forecast of $2.50 to $2.70 per share, but maintained its operating revenue guidance between $18.1 billion and $18.3 billion. Street is currently looking for fiscal 2013 earnings of $2.66 per share on annual revenues of $18.15 billion.
CTL closed Wednesday's regular trading session at $37.30, up $0.24 or 0.65% on a volume of 7.44 million shares. The stock gained a further $0.88 or 2.36% in after-hours trading.
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