CenturyLink’s Q2 profit sinks on revenue loss

Thu, 08/06/2009 - 8:15am
David Twiddy, AP Business Writer

KANSAS CITY, Mo. (AP) – Telecommunications company CenturyLink, which changed its name from CenturyTel Inc. last month after purchasing Embarq Corp., on Thursday said its second-quarter profits fell 25 percent.

But the company still beat Wall Street estimates and raised its annual earnings guidance above analysts' predictions.

The Monroe, La.-based company reported earning $69 million, or 68 cents per share. By comparison, the company earned $92.2 million, or 88 cents per share, during the same period a year ago.

CenturyLink reported adjusted income of 83 cents per share, excluding items such as $22.5 million in costs tied to the Embarq acquisition.

Analysts surveyed by Thomson Reuters expected earnings of 80 cents per share.

Revenue declined 3.6 percent from $658 million to $634.5 million, just under analysts' predictions of $634.8 million.

CenturyLink said it lost 144,000 access lines, a 7 percent decline, reflecting an industry-wide trend as consumers swap their landline phones for wireless and Internet-based telephone services. It added 74,000 high-speed Internet customers.

The company bought Overland Park, Kan.-based Embarq on July 1, becoming the fourth-largest traditional telephone company in the country.

Following the purchase, CenturyLink said it now expects annual earnings of between $3.20 and $3.30 per share, not including one-time items.

Analysts are expecting earnings of $3.05 per share.

The company added that it now expects cost savings from the Embarq purchase of $475 million, up from the original estimate of $400 million.

CenturyLink said Embarq posted an 8 percent decrease in revenue to $1.3 billion during the quarter, losing 163,000 access lines but adding 12,200 high-speed Internet customers.

Combined with Embarq, CenturyLink serves mostly rural customers in 33 states, although it has a few urban markets, including Las Vegas.

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