CenturyLink, Inc., the telecommunications provider that acquired Qwest Communications last month, said its revenues declined in the first quarter as the company continued to lose traditional phone lines.
Operating revenues ($1.695 billion) decreased 5.8 percent decrease from the prior year period ($1.8 billion).
The revenue decline was primarily due to the impact of access line losses and lower access revenues, including the anticipated impact of lower universal service fund receipts and wireless and long distance traffic migration,” the company said.
However, CenturyLink said it reduced its access line losses by 15.2 percent compared to the period a year ago. The communications provider ended the quarter with 6.39 million access lines, a 7.5 percent decline from a year ago (6.913 million lines).
CenturyLink reported a profit of $211.1 million or diluted earnings per share of $0.69. That compared to net income of $252.6 million and diluted EPS of $0.84 during the first quarter of 2010.
Including its first quarter results, the combined CenturyLink and Qwest operations prospectively from April 1, 2011 and excluding the effects of any special items that may occur, CenturyLink provided guidance for the entire year. The company expects annual operating revenues of $14.9 billion to $15.1 billion, diluted earnings per share of $2.55 to $2.65 and capital expenditures of $2.2 billion to $2.3 billion.
CenturyLink also provided select financial data for Qwest, which it acquired on April 1, 2011. Qwest brought in operating revenues of $2.85 billion, a 4.1 percent decline from its result in the first quarter of 2010. Excluding special items, Qwests net income rose $20 million over the prior year period to $220 million.
Fresh off its acquisition of Denver-based Qwest, CenturyLink announced plans last month to purchase Savvis, a provider of cloud infrastructure and hosted IT solutions for enterprises. The agreement calls for CenturyLink to acquire the outstanding shares of Savvis common stock in a cash and stock merger valued at $2.5 billion, or $40 per share. CenturyLink also will assume about $700 million in net debt.
Missouri-based Savvis (NASDAQ: SVVS) serves about 2,500 customers, including 32 of the top 100 companies in the Fortune 500, according to its website.