NYSE$LUMN

Lumen Technologies Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Lumen's financial performance declined due to a net loss, partially offset by strategic divestitures and leadership changes.

Lumen Technologies reported a net loss of $(3.069) billion for Q4 2022, impacted by a $3.271 billion non-cash goodwill impairment charge. Despite the loss, the company completed the $7.5 billion divestiture of its 20-state ILEC business and announced the proposed sale of its EMEA business for $1.8 billion. Kate Johnson was appointed as the new president and CEO.

  • Kate Johnson appointed as president and CEO.
  • Completed $7.5 billion divestiture of 20-state ILEC business to Apollo.
  • Announced exclusive arrangement for proposed sale of EMEA business to Colt Technology Services for $1.8 billion.
  • Reported net loss of $(3.069) billion, including a $3.271 billion non-cash goodwill impairment charge.

Headline financials

Total Revenue

$3.8B

Previous: $4.85B-21.6%
EPS (adj)

$0.43

Previous: $0.51-15.7%
Adjusted EBITDA

$810M

No prior period
Adjusted EBITDA Excluding Special Items

$1.39B

No prior period
Adjusted EBITDA Margin

21.3%

No prior period
Adjusted EBITDA Margin Excluding Special Items

36.7%

No prior period
Unlevered Cash Flow

$264M

No prior period
Unlevered Cash Flow Excluding Cash Special Items

$382M

No prior period
Net Income Excluding Special Items

$425M

No prior period
Free Cash Flow Excluding Cash Special Items

$126M

No prior period
Free Cash Flow

$8M

No prior period
Net Income

-$3.07B

Previous: $508M-704.1%
Operating Income

-$3.28B

Previous: $1.16B-382.9%
Gross Profit

$1.97B

Previous: $2.76B-28.5%
Cash & Equivalents

$1.25B

Previous: $354M+253.4%
Total Assets

$45.6B

Previous: $58B-21.4%
Stock-Based Comp

$27M

Previous: $31M-12.9%

Revenue & EPS history

Lumen · Revenue · Quarterly

$3.8B

Q4 2022-21.6%vs Q4 2021
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

Lumen · $6.81B total across 6 segments · Q4 2022

  • Business Segment Revenue
    $3.01B
  • Wholesale
    $819M
  • Large Enterprise
    $804M
  • International and Other
    $797M
  • Mass Markets Segment Revenue
    $795M-41.2%
  • Mid-Market Enterprise
    $585M

Forward guidance

Lumen Technologies provided its full-year 2023 financial outlook, projecting adjusted EBITDA between $4.6 to $4.8 billion and free cash flow between $0 to $200 million.

Tailwinds

  • Adjusted EBITDA is projected to be between $4.6 to $4.8 billion.
  • Net Cash Interest is expected to be between $1.1 to $1.2 billion.
  • GAAP Interest Expense is anticipated to be $1.200 billion.
  • Depreciation and Amortization are forecasted to be between $2.9 to $3.1 billion.
  • Stock-based Compensation Expense is expected to be approximately $125 million.

Headwinds

  • Free Cash Flow is projected to be between $0 to $200 million.
  • Capital Expenditures are expected to be between $2.9 to $3.1 billion.
  • Cash Income Taxes are estimated to be around $200 to $300 million, excluding the impact of taxes related to divestitures.
  • Full Year Effective Income Tax Rate is projected to be approximately 26%.
  • The outlook excludes the effects of Special Items and unforeseen events.

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 Q4 2022

Historical avgQ4 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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