Nov. 5, 2014, 6:03 PM
- Though CenturyLink (NYSE:CTL) beat Q3 estimates, it's guiding for Q4 revenue of $4.44B-$4.49B and EPS of $0.59-$0.64, largely below a consensus of $4.5B and $0.64.
- Q3 free cash flow was $780M, +2% Y/Y and above net income of $359M. However, op. cash flow margin fell to 38.7% from 40% a year ago.
- Consumer revenue -1% Y/Y to $1.49B; business revenue +2% to $1.57B; wholesale -4% to $843M; hosting +6% to $361M.
- 14K Prism TV subs were added, raising the base to 229K. Broadband subs rose by 8K to 6.06M. Access lines fell by 170K to 12.54M.
- CTL nearly unchanged AH. Q3 results, PR.
Nov. 5, 2014, 4:09 PM
Nov. 4, 2014, 5:35 PM
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Oct. 28, 2014, 11:49 AM| Comment!
Sep. 29, 2014, 7:02 PM
- CenturyLink (NYSE:CTL) is partnering with Chinese IT services firm Neusoft to offer managed Web Hosting, data center colocation, and "cloud presence" services in the Middle Kingdom.
- Competition will be provided by Alibaba, China Unicom, China Telecom, and a variety of other local firms. In addition, IBM, Microsoft, and Amazon have each begun offering cloud infrastructure (IaaS) services in China.
- CenturyLink's hosting division revenue rose 3% Y/Y in Q2 to $358M. The telco is hoping to boost growth with the help of a major expansion of its global data center footprint. It apparently decided to pass on an acquisition of Web hosting/IaaS provider Rackspace.
Sep. 15, 2014, 3:49 PM
Sep. 8, 2014, 2:05 AM
- Following months of takeover speculation and a strategic review that started in May, CenturyLink (NYSE:CTL) is now looking to acquire Rackspace (NYSE:RAX), Bloomberg reports.
- A deal would enable CenturyLink to better compete against competitors by expanding its offerings of Internet and cloud services.
- Rackspace’s sales climbed 17% in 2013 to $1.5B, with $415.2M coming from cloud computing. CenturyLink’s revenue declined 1.5% to $18.1B last year.
Sep. 6, 2014, 8:43 AM
- The "total" yield of a company combines the dividend yield and the buyback yield - that is the yield boost from reducing the total amount of shares outstanding. Together with S&P's Howard Silverblatt, Barron's puts together a list of the top 20 companies in the S&P 500 based on "total" yield.
- While buybacks don't guarantee a strong stock - witness consistent buyback champs like IBM and Kohl's (NYSE:KSS) - Warren Buffett goes to bed at night praying for IBM's share price to go down so the company can buy back more stock for a given dollar amount (though The Oracle has said he doesn't expect this logic to win many fans).
- The flip-side are those companies - financials and energy come to mind - who tend to buy back stock at high prices only to find themselves forced to reissue it at lower prices when times get tough. A consistent plan helps, and Travelers (NYSE:TRV), under CEO Jay Fishman, has been maybe the best example of this - halving the share count since the end of 2006.
- ETFs? The Powershares Buyback Achievers Portfolio (NYSEARCA:PKW) gained 45.6% in 2013, 1,300 basis points better than the S&P 500. Since inception in 2006, it's up an annualized 9%, more than 200 basis points better than the S&P. A newcomer - the Cambria Shareholder Yield ETF (NYSEARCA:SYLD) - has beaten the S&P by about 250 basis points since its May 2013 inception.
- The list (ranked in order of "total" yield): ADT, CAM, CF, MOS, MPC, VIAB, GLW, ITW, STX, IBM, NOC, CTL, TRV, VRSN, IR, CCE, KSS, NTAP, HES, DO.
Aug. 19, 2014, 12:04 PM
Aug. 19, 2014, 2:50 AM
- The National Association of Broadcasters has filed a lawsuit against the FCC's plans to auction off airwaves stating that the plan will incur expense and harm coverage of TV stations.
- The auction is set to take place next year, and will allow TV stations to take bids and sell their airwaves to meet the surging demand of mobile broadband.
- The new lawsuit challenges the regulations stating that it doesn't fully protect broadcasters that don't participate in the auction.
- Broadcasters say that they should not be forced into having their coverage area reduced or to pay out of pocket for the expense of moving their broadcast signal to a new frequency.
- Relevant tickers: CMCSA, TWC, ALLT, LVLT, CCOI, FTR, WIN, CTL, CHTR, CVC, DISH
Aug. 6, 2014, 4:37 PM
- CenturyLink (NYSE:CTL) expects Q3 revenue of $4.47B-$4.52B and EPS of $0.58-$0.63 vs. a consensus of $4.5B and $0.62.
- Consumer revenue rose fractionally Y/Y in Q2 to $1.5B. Business revenue +3% to $1.56B, wholesale -5% to $866M, hosting +3% to $358M.
- Free cash flow was $677M, -4% Y/Y but above net income of $408M. Excluding special items, op. margin fell to 15.9% from 16.2% a year ago, thanks largely to a 230 bps drop in business segment margin to 37.9%. CenturyLink blames "higher costs related to business revenue growth," along with legacy (voice) revenue declines.
- Prism TV subs grew by nearly 16K, while broadband subs fell by 2.1K (seasonality is blamed). CenturyLink has 215K Prism TV subs, and 6M+ broadband subs.
- $160M was spent on buybacks in Q2. 1H14 dividend payments totaled $616M.
- Shares are unchanged AH for now. Q2 results, PR.
Aug. 6, 2014, 4:20 PM
Aug. 5, 2014, 5:35 PM
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Jul. 29, 2014, 12:14 PM
- "I’m skeptical it can be replicated," says Elevation LLC's Stephen Sweeney about Windstream's (WIN +12.9%) REIT spinoff plans. "It’s very unclear if other large cap companies can have their companies viewed by the IRS as real estate."
- UBS also has its doubts: It thinks AT&T (T +3.3%) and Verizon (VZ +1.8%) would have to open up their networks to rivals if they were spun off into REITs, something it doesn't think the carriers will be keen on doing.
- Oppenheimer's Tim Horan is more positive, albeit while cautioning Windstream's spinoff isn't a done deal. "If successful with this restructuring, and there are obviously high regulatory barriers, this will be a game changer for the valuation of non-REIT infrastructure stocks in our industry.”
- AT&T, Verizon, Windstream, Frontier (FTR +11.7%), and CenturyLink (CTL +4.2%) have pared their morning gains a bit amid volatile trading on very heavy volumes. AT&T has seen 66M shares trade vs. a daily average of 19.3M; Frontier has seen 89M trade vs. an average of 6.9M.
- Enthusiasm about Windstream's spinoff stems not only from the tax benefits provided to REITs - American Tower's tax expense has been halved since it converted into a REIT in 2012 - but also from the potential for spinoffs to spark new M&A activity.
- Windstream CFO Tony Thomas: "The REIT is going to be uniquely positioned to be in a great spot to help unlock value at other companies ... We have a good understanding of how the REIT opportunity could work in the telecom landscape."
- Earlier: Telcos soar following Windstream's REIT announcement
Jul. 29, 2014, 10:14 AM
- Windstream's (WIN +22.3%) plans to spin off some of its telecom network assets into a REIT (following a favorable IRS ruling) has lit a fire under U.S. telecom carriers, as investors bet more REIT announcements will happen. Some might also be hoping REIT spinoffs spark additional M&A activity in an industry that has seen plenty of it.
- Frontier (FTR +15.8%) and CenturyLink (CTL +8.1%) are also off to the races, and AT&T (T +3.9%), Verizon (VZ +1.9%), and Sprint (S +2%) aren't doing badly either.
- Other gainers include Alaska Communications (ALSK +5.2%), TDS (TDS +4.1%), and Lumos Networks (LMOS +5.5%), as well as Level 3 (LVLT +5.9%) and merger partner TW Telecom (TWTC +5.2%). Level 3 posted a Q2 beat this morning.
- Windstream's spinoff will feature its fiber/copper networks and other real estate. The company expects to retire $3.2B in debt following the spinoff (expected to close in Q1 2015), and to have the REIT raise $3.5B in debt.
- Windstream plans to have an aggregate annual dividend of $0.70/share following the spinoff ($0.60 for the REIT, $0.10 for Windstream proper). That's down from a current $1.00/share.
Jul. 29, 2014, 9:08 AM
CTL vs. ETF Alternatives
CenturyLink Inc, together with its subsidiaries, is an integrated communications company engaged primarily in providing a broad array of communications services including local and long distance voice, data, Internet access & broadband services etc.
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