![]() ![]() In terms of free cash flow, Lumen Technologies finished the year much stronger than expected, compared to the company's previous guidance. Lumen Technologies previously forecasted adjusted EBITDA of $8.4 billion to $8.6 billion and adjusted free cash flow of $2.8 billion to $3 billion. The main reason to invest in Lumen Technologies is its excellent free cash flow, which more than covers the dividend payout. Lumen Technologies increased its free cash flow by 26% YoY compared to 2020, owing to improved execution and cost discipline. The company generated $776 million in free cash flow in the fourth quarter, adjusted for special items, and $3.74 billion in 2021. More importantly, Lumen Technologies' free cash flow remained strong in the last quarter. Quarterly Performance (Lumen Technologies) Lumen Technologies' adjusted EBITDA margin increased by 0.6 percentage point over the previous quarter, at least partially offsetting the quarter's negative revenue effects. Cost cuts resulted in a higher EBITDA margin in the fourth quarter. However, EBITDA and free cash flow performance was strong, owing largely to lower corporate expenses. The $0.51-per-share figure fell two cents short of the consensus estimate of $0.53. Lumen Technologies' net income increased by 21% YoY on an adjusted per-share basis. Lumen Technologies had adjusted net income of $453 million, or $0.42 per share, in the prior quarter. After adjusting for special items, net income for 4Q-21 was $522 million, or $0.51 per share. The telecom company reported a net loss of $2.29 billion, or $2.12 per share, in 4Q-20. However, earnings improved, with the report revealing a net income of $508 million, or $0.50 per share, for the fourth quarter of the year. Sales were also down QoQ and across all sales channels, indicating that the company is still facing significant revenue headwinds in its industry. Revenue for 4Q-21 was reported at $4.85 billion, a decrease from $5.13 billion in the previous quarter. Lumen Technologies is one of a growing number of companies that have been punished by investors this quarter due to poor performance.Īccording to Lumen Technologies' earnings report, the telecom company lost 5.4% of its revenue YoY in the fourth quarter due to a challenging market environment. Correction Translates Into Buying Opportunity The telecom company's dividend is comfortably covered by free cash flow and has been reaffirmed. The stock is now oversold, and the market's reaction to Lumen Technologies' outlook is likely exaggerated. Lumen Technologies ( NYSE: LUMN) has dropped more than 20% in the last three days after the company's EBITDA and free cash flow forecasts for 2022 disappointed investors. ![]()
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