CenturyLink’s Q3 profit triples on Embarq buyout

Thu, 11/05/2009 - 7:30am
The Associated Press

MONROE, La. (AP) – Telecommunications company CenturyLink on Thursday said its third-quarter profit more than doubled following its July purchase of Embarq Corp.

The company, formerly known as CenturyTel, also raised its profit forecast for the year.

Net income rose to $280.8 million, or 94 cents per share, compared with $84.7 million, or 83 cents per share, in the third quarter of 2008.

The results include various gains and charges associated with buying Embarq. Excluding these items, profit in the recent quarter was 90 cents per share. The number of shares outstanding nearly tripled as a result of the $5.8 billion acquisition, which was done with stock.

Analysts polled by Thomson Reuters, on average, expected profit of 81 cents per share. Analyst estimates typically do not include one-time gains and charges.

CenturyLink said revenue almost tripled to $1.87 billion from $650.1 million. Embarq contributed $1.3 billion in revenue.

Wall Street forecast revenue of $1.88 billion.

CenturyLink had 7.2 million landline subscribers at the end of the quarter, down 2.3 percent from 7.4 million in the June quarter. The decline reflects a nationwide trend of consumers abandoning landlines for wireless phones.

The company said its high-speed Internet subscribers grew 2 percent to 2.2 million from 2.1 million in the June quarter.

CenturyLink now expects fourth-quarter profit between 84 cents and 88 cents per share. Analysts, on average, project profit of 82 cents per share.

The company forecast fourth-quarter revenue between $1.81 billion and $1.85 billion, while analysts forecast $1.86 billion.

For the year, the CenturyLink raised its profit guidance to a range of $3.45 to $3.50 per share, up from a prior forecast of $3.20 to $3.30 per share. That's well ahead of Wall Street's forecast of $3.27 per share.

In morning trading, CenturyLink shares rose $1.20, or 3.6 percent, to $34.38. They earlier traded at a new 52-week high of $34.49.

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