CenturyLink Expected to Announce Lower Revenues for Q1 2019

CenturyLink expected to make reference to high investments to improve business operations when reporting unimpressive first quarter results.

American telecommunications company, CenturyLink is scheduled to release its first quarter 2019 results on May 8, 2019. According to market analysts, the company is expected to report disappointing revenues for the first quarter. This is because the company has made some heavy investments to develop its legacy business model. In addition, the company had to deal with a difficult macroeconomic environment in the first quarter. However, it will be interesting to see if these factors have actually affected the company’s first quarter performance, or not at all.

According to Zacks, CenturyLink is less likely to surpass the earnings expectations of analysts for the first quarter 2019. Lack of key components such as a strong Zacks Rank and Earnings ESP in the positive could be one of the main reasons the analysts are not so confident about the company beating estimates. The Zacks Consensus Estimate for the company is $0.27 and the Most Accurate Estimate is $0.26. This has resulted into a negative Earnings ESP of -6.14%. However, the company has a Zacks Rank #3, which might impress analysts. Nevertheless, the Zacks Rank is not enough to encourage analysts to predict that the company will beat estimates for the first quarter.

Secular declining trends could be another reason that CenturyLink is anticipated to report lower Y-o-Y revenues for the first quarter of 2019. The company has had a telling push on infrastructure development to bring improvement in its long-term revenue growth prospects. The Zacks Consensus Estimate for first quarter revenues earned from the business segment stands at $4,268 Mn. The business segment takes a major share of the company’s total revenues. The company is expected to announce total revenues of $5,729 Mn for the first quarter. This is a decrease from the year-ago quarter’s $5,945 Mn. The consumer segment is projected to have created revenues of $1,282 Mn in the first quarter.

With a view to meet the demand for scalable, reliable, and fast content from enterprise and entertainment customers, CenturyLink stretched its content delivery network in Mexico, Brazil, Chile, and other Latin American countries during the first quarter of 2019. It made massive investments to improve its business operations via the digitalization of customer interaction and product evolution. It also extended its service portfolio to accommodate Cisco BroadCloud Flex. This helped the company to strengthen its voice and real-time communication capabilities. Furthermore, the company formed a collaboration with the State of New Mexico’s local government agencies to provide cloud solutions for transferring highly sensitive data across the platform.