Revenue Down, But Profit Up for CenturyLink

By Craig Galbraith Comments
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CenturyLink managed to raise its profit by 2.6 percent in the fourth quarter of 2013 despite the fact that its revenue slipped for the sixth quarter in a row.

Profit was $239 million, up from $233 million in the year-ago quarter, thanks in part to the fact that the Monroe, La.-based communications giant was able to pay less in income taxes.

Operating revenue was $4.54 billion, almost 1 percent less than in Q4 2012. The steady reduction in landline customers – a problem many of the big telcos are facing as more customers go wireless-only – was the primary reason why, MarketWatch noted.

CenturyLink says its Business segment was buoyed by continued demand for high-bandwidth data services and solid sales momentum. Strategic revenue was $643 million in the quarter, up 7.5 percent from a year ago. It was driven by high-bandwidth offerings such as MPLS and Ethernet services. The entire division brought in $1.56 billion in sales, up 1 percent from Q4 2012 – those high-bandwidth offerings offset lower legacy-services revenue.

Data hosting was another area of strength. Managed hosting – including cloud – and colocation services revenue grew as cross-selling initiatives continued to strengthen sales opportunities. Operating revenue was $353 million, up 3.8 percent year over year. Colocation revenue was $147 million, up 1.4 percent. Managed hosting saw the biggest jump, up 14 percent, to $142 million.

Just last month, its Savvis subsidiary began operating as CenturyLink Technology Solutions, aligning the brand with CenturyLink and demonstrating deeper ties to its portfolio of IT solutions delivered to businesses. The company in November announced the acquisition of Seattle-based Tier 3, a public cloud provider, which CenturyLink says "enhances our ability to deliver world-class, automated cloud and managed services for our customers ..."

"[These] investments in our key initiatives continue to strengthen CenturyLink's ability to innovate, differentiate and succeed in a very competitive marketplace," said Glen F. Post III, chief executive officer and president of CenturyLink.

The company added 49,000 high-speed Internet subscribers; it now has 6 million subs for the service in all. CenturyLink's nascent Prism TV service also made gains, up 26,000 subscribers, for a total of 175,000.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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