NYSE$LUMN

Lumen Technologies Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Lumen's third quarter results were reported, featuring a net income increase and strategic capital allocation updates.

Lumen Technologies reported a Net Income of $578 million for Q3 2022, compared to $544 million in Q3 2021. The company updated its full-year outlook for free cash flow and capital expenditures, eliminated its stock dividend, and authorized a $1.5 billion share repurchase program. Additionally, Lumen entered an exclusive arrangement for the proposed sale of its EMEA business and completed the divestiture of its 20-state ILEC business.

  • Net Income increased to $578 million, up from $544 million in the same quarter last year.
  • Diluted EPS was $0.57, compared to $0.51 in the third quarter of 2021; excluding special items, EPS was $0.14.
  • Free Cash Flow was $620 million, compared to $1.072 billion for the third quarter 2021, excluding cash paid for Special Items.
  • The company has eliminated its stock dividend and authorized a share repurchase program of up to $1.5 billion.

Headline financials

Total Revenue

$4.39B

Previous: $4.89B-10.2%
EPS (adj)

$0.14

Previous: $0.49-71.4%
Adjusted EBITDA

$2.22B

No prior period
Adjusted EBITDA Excluding Special Items

$1.69B

No prior period
Adjusted EBITDA Margin

50.5%

No prior period
Adjusted EBITDA Margin Excluding Special Items

38.5%

No prior period
Unlevered Cash Flow

$665M

No prior period
Unlevered Cash Flow Excluding Cash Special Items

$1.01B

No prior period
Net Income Excluding Special Items

$146M

No prior period
Capital Expenditures

$845M

No prior period
Mass Markets Total Broadband Subscribers

4.3M

No prior period
Fiber Broadband Subscribers

889.0K

No prior period
Mass Markets Total Broadband Enabled Units

29.3M

No prior period
Free Cash Flow

$578M

Previous: $544M+6.3%
Net Income

$578M

Previous: $544M+6.3%
Operating Income

$1.38B

Previous: $1.13B+22.4%
Gross Profit

$2.39B

Previous: $2.74B-12.6%
Cash & Equivalents

$252M

Previous: $635M-60.3%
Total Assets

$54.8B

Previous: $58.3B-6.0%
Stock-Based Comp

$23M

Previous: $27M-14.8%

Revenue & EPS history

Lumen · Revenue · Quarterly

$4.39B

Q3 2022-10.2%vs Q3 2021
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

Lumen · $7.61B total across 6 segments · Q3 2022

  • Business Segment Revenue
    $3.22B
  • Mass Markets Segment Revenue
    $1.17B-14.9%
  • Wholesale
    $902M
  • International and Other
    $853M
  • Large Enterprise
    $844M
  • Mid-Market Enterprise
    $618M

Forward guidance

Lumen updated its full-year 2022 financial outlook, excluding the effects of Special Items and unforeseen changes.

Tailwinds

  • Adjusted EBITDA is projected to be $6.9 to $7.1 billion.
  • Free Cash Flow is expected to be $2.2 to $2.4 billion.
  • Net Cash Interest is estimated at $1.3 to $1.4 billion.
  • Depreciation and Amortization are anticipated to be $3.2 to $3.4 billion.
  • The effective income tax rate is expected to be around 26%.

Headwinds

  • Capital Expenditures are projected to be $3.0 to $3.2 billion.
  • Stock-based Compensation Expense is expected to be approximately $100 million.
  • Cash Income Taxes are estimated to be around $100 million.
  • The outlook excludes the impacts of Special Items and future changes in operating or capital allocation plans.
  • Dividend guidance has been withdrawn, and there will be no dividend payment in the fourth quarter of 2022.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+0.5%

Avg return

Earnings day

+1.8%

Avg return

5 days after

-2.0%

Avg return

30 days after

49%

33 / 68 earnings

Positive

+156.0%

Q2 2024

Best reaction

-34.2%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+4.6%-9.6%-3.6%
Q4 2025-21.6%-8.2%-21.7%
Q3 2025+14.2%+5.0%-21.6%
Q1 2025+6.9%+20.2%+11.4%
Q4 2024-1.4%-1.2%+5.2%
Q3 2024+20.6%+28.2%-13.5%
Q2 2024+156.0%+115.1%+112.4%
Q1 2024-0.8%+8.2%+4.9%
Q4 2023+12.4%+17.8%+34.1%
Q3 2023-34.2%-24.8%-12.1%
Q2 2023+0.0%-7.3%-11.2%
Q1 2023-3.8%-4.2%-18.1%
Q4 2022-21.6%-21.4%-42.9%
Q3 2022-21.9%-18.7%-25.8%
Q2 2022+0.6%+1.9%-8.5%
Q1 2022+3.2%+7.1%+11.8%
Q4 2021-14.6%-21.8%-15.8%
Q3 2021+12.2%+14.6%+1.1%
Q2 2021-7.3%-6.3%-1.5%
Q1 2021+2.3%+8.8%+12.3%
Q4 2020-8.4%-6.2%+11.7%
Q3 2020+1.9%+1.5%+15.9%
Q2 2020+6.9%+9.9%+8.9%
Q1 2020-4.9%-3.4%+8.0%
Q4 2019-7.0%-6.9%-32.2%
Q3 2019+8.9%+10.2%+3.6%
Q2 2019-10.5%-6.3%-1.3%
Q1 2019-4.8%-7.9%-7.6%
Q4 2018-12.2%-5.6%-16.9%
Q3 2018-11.9%-12.5%-18.6%
Q2 2018+12.5%+17.4%+17.7%
Q1 2018+7.0%+6.1%-2.6%
Q4 2017+11.2%+10.0%-0.5%
Q3 2017-4.6%-5.5%-9.6%
Q2 2017-3.9%-4.4%-14.2%
Q1 2017-8.5%-4.4%-0.3%
Q4 2016-1.8%-1.0%-7.0%
Q3 2016-17.8%-24.2%-22.6%
Q2 2016-1.1%-1.0%-8.7%
Q1 2016-7.8%
Q4 2015+10.0%
Q3 2015+0.8%
Q2 2015-1.8%
Q1 2015-4.1%
Q4 2014-2.2%
Q3 2014-6.3%
Q2 2014-0.9%
Q1 2014+7.0%
Q4 2013+1.5%
Q3 2013-4.7%
Q2 2013-5.0%
Q1 2013+0.5%
Q4 2012-22.7%
Q3 2012+1.9%
Q2 2012+1.6%
Q1 2012+0.2%
Q4 2010+0.6%
Q4 2011+0.6%
Q3 2011+3.6%
Q2 2011+4.9%
Q1 2010+0.8%
Q1 2011-1.7%
Q4 2008+0.2%
Q3 2010-0.7%
Q3 2009-0.7%
Q4 2009+0.2%
Q2 2010+0.2%
Q2 2009+0.2%

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