TV and internet services provider CenturyLink turned a corner Wednesday with a strong fourth quarter earnings report and 2016 forecast that beat analyst expectations.
The company, which has been plagued by operating losses over the last several years as it struggled to transition from landline telephone services to TV and broadband internet, posted a fourth quarter net income of $338 million on operating revenues of $4.48 billion. Net income and revenue for the quarter were both up from $188 million and $4.44 billion, respectively, the year before.
For the full year, however, operating revenues decreased slightly to $17.9 billion from $18.0 billion in 2014.
Full year net income for 2015 stood at $878 million, up from $772 million in 2014. Earnings per share for the full year were $1.58, an increase over $1.36 for the full year 2014.
Both Business and Consumer revenues were up sequentially for the quarter, though full year Business figures were down 1.6 percent from 2014 due to declines in low-bandwidth data services and legacy revenues.
Operating expenses for the quarter were also down to $3.71 billion from $3.86 billion in fourth quarter 2014.
In a statement, CenturyLink CEO Glen Post commended the companies employees for their help with cost cutting efforts and said the company is looking forward to the continued growth of its IT business in the coming year.
“As we look to 2016, we are seeing strong demand for high-bandwidth data and managed services from businesses, which we expect to help mitigate the anticipated further declines in our legacy revenues,” Post said. “Our IT services business, while relatively small today, continued to grow and gain traction during 2015, generating revenues that more than doubled compared to the prior year. We also have a solid funnel of business services opportunities going into 2016, which we expect to help drive network and managed services revenue.”
During the quarter, CenturyLink said it added 16,000 Prism TV customers, ending the period with approximately 285,000 total customers. The gains were consistent with video adds made by other providers in the fourth quarter, including 11,000 video adds for Charter Communications, 54,000 for Time Warner Cable and 89,000 for Comcast.
However, the company said it lost nearly 22,000 high-speed Internet customers, dropping to around six million total subscribers.
CenturyLink on Wednesday also posted a positive full year 2016 earnings per share figures that beat analyst expectations. The company said it is expecting $2.50 to $2.70 earnings per share for the full year 2016 on operating revenues of $17.55 to $17.8 billion.
Analysts had only been expecting a per-share profit of $2.36 and revenue of $17.7 billion, according to Thomson Reuters.
Post did not provide any further detail about the company’s plan to sell its data centers, which he mentioned in comments made in November. At the time, Post said CenturyLink did not believe the ownership of physical data centers was necessary to effectively deliver its service offerings and was exploring “strategic alternatives.”
