Yahoo Finance Lumen Technologies Inc (LUMN) Q1 2024 Earnings: A Detailed Review
Net Income: Reported at $57 million for Q1 2024, a significant decrease from $511 million in Q1 2023, falling short of the estimated $0.51 million.
Diluted EPS: Stood at $0.06, down from $0.52 year-over-year, compared to an estimate of $0.00.
Revenue: Totaled $3.29 billion, down 12% from $3.738 billion in the previous year, below the estimated $3.368 billion.
Free Cash Flow: Excluding special items, reached $518 million, a substantial improvement from negative $(75) million in Q1 2023.
Adjusted EBITDA: Excluding special items, was $977 million, down 22% from $1.251 billion in the prior year.
Capital Expenditures: Increased to $713 million from $640 million in Q1 2023, indicating ongoing investment in infrastructure.
Net Cash Provided by Operating Activities: More than doubled to $1.102 billion from $595 million in Q1 2023.
Lumen Technologies Inc (NYSE:LUMN) disclosed its financial results for the first quarter of 2024 on April 30, 2024, through its 8-K filing. The company reported a net income of $57 million, a significant decrease from $511 million in the same quarter the previous year. This quarter's diluted earnings per share stood at $0.06, contrasting sharply with the $0.52 of Q1 2023. Despite these figures, the company's performance aligned closely with analyst projections, which estimated earnings per share at $0.00 and net income at $0.51 million for the quarter.
Company Overview
With a robust infrastructure comprising 450,000 route miles of fiber, Lumen Technologies is a major player in the U.S. telecommunications sector, primarily serving global enterprises. Following its merger with Level 3 in 2017 and the divestiture of much of its incumbent local exchange carrier (ILEC) business in 2022, Lumen has pivoted towards enterprise services, which now constitute nearly 80% of its revenue. The company offers a comprehensive range of communications services including colocation and data center services, data transportation, and end-user phone and internet service. On the consumer side, Lumen provides broadband and phone service across 37 states, boasting 4.5 million broadband customers.
Financial Performance and Strategic Initiatives
Lumen's first quarter of 2024 was marked by significant strategic activities, including the completion of TSA transactions which strengthened its balance sheet and addressed over $15 billion of debt and commitments. This restructuring extended maturities of over $10 billion due in the next four years to 2029 and beyond, and secured $2.3 billion in new liquidity to support growth initiatives. Despite a decline in net income and EPS, Lumen generated a robust $1.102 billion in net cash from operating activities and $518 million in free cash flow, a stark improvement from the negative $75 million in the prior year's first quarter.
Adjusted EBITDA for the quarter was reported at $977 million, down from $1.251 billion in Q1 2023, reflecting some operational challenges. However, these figures exclude the impact of special items, which significantly influenced the financial outcomes. The company's management remains optimistic, citing improvements in customer satisfaction and sales performance in North America as indicators of potential future revenue growth.
Revenue and Cash Flow Details
Total revenue for Q1 2024 stood at $3.290 billion, a decrease from $3.738 billion in the same quarter last year. This decline was primarily due to lower revenues across all business segments, with particularly notable reductions in the International and Other segment, which plummeted by 65% year-over-year. Despite these challenges, the company managed to significantly boost its free cash flow, excluding special items, to $518 million, compared to a negative $75 million in Q1 2023.
Looking Ahead
Lumen has reiterated its full-year 2024 financial outlook, expecting Adjusted EBITDA to be between $4.1 and $4.3 billion and free cash flow to range from $100 to $300 million. These projections are based on current operational strategies and market conditions, excluding unforeseen changes and special items.
In summary, while Lumen Technologies Inc faced some financial headwinds in the first quarter of 2024, strategic initiatives aimed at debt restructuring and liquidity enhancement have positioned the company to potentially improve its financial health and operational performance in the upcoming periods. Investors and stakeholders may look forward to a stabilization of financial metrics as the company continues to execute its growth and efficiency strategies.
Explore the complete 8-K earnings release (here) from Lumen Technologies Inc for further details.
This article first appeared on GuruFocus.
