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CenturyLink CEO ‘Very Pleased’ With Business, Hosting Segments’ Results

By Kelly Teal
May 08, 2014 - News

CenturyLink stock reached an 11-month high on Thursday as the company rode investor goodwill stemming from its first-quarter earnings.

CenturyLink late Wednesday reported earnings per share of 66 cents; analysts polled by Thomson Reuters had expected 61 cents per share. Still, CenturyLink’s revenue remained flat, coming in at $4.54 billion compared to $4.51 billion in 2013’s first quarter. Profit, meanwhile, fell 31.9 percent to $203 million, compared with $298 million a year earlier.

Nonetheless, shares of the service provider closed 6.4 percent higher on Thursday at $36.86, reflecting the best day of trading for the Louisiana-based company in almost a year. Much of investors’ enthusiasm likely can be attributed to gain in CenturyLink’s business and hosting segments.

To the first point, the business unit saw a 3.6 percent revenue increase, reaching $1.56 billion, thanks to MPLS, Ethernet and other high-bandwidth services, CenturyLink said. Data integration also showed more traction compared to last year. Overall, those gains offset losses in legacy services, a segment that continues to decline throughout the industry.

Next, the hosting division helped propel CenturyLink to improved first-quarter earnings, too. The unit, which includes cloud and colocation, reported a 6 percent increase in operating revenue, topping $354 million. Managed hosting revenue grew 12.7 percent, and colocation revenue was up 3.4 percent.

CenturyLink CEO Glen Post said CenturyLink remains focused on business networking platforms, cloud and IP services, consumer broadband and video, and operating efficiency.

“We are very pleased with the growth we're seeing our solutions-based approach MPLS and Ethernet, we're seeing crossover selling cloud hosting into the network customer base, managed service is driving a lot of interest from customers, as well," Post said in a May 7 conference call with analysts, according to a transcript from Seeking Alpha. “So we are very pleased with the response we're seeing throughout our marketing efforts and sales efforts in the business segment."

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Both revenue and profit were up for the company in the second quarter.
Craig Galbraith
However, the managed services provider did report higher revenue.