Lumen misses quarterly revenue estimates on declining wireline services demand, ET Telecom

Telecommunications services firm Lumen Technologies missed Wall Street estimates for first-quarter revenue on Tuesday, as customers move away from its core local wireline telephone services to wireless carriers.

The Monroe, Louisiana-based firm has been facing continued demand weakness coupled with massive debt, while a decline in traditional internet services has hurt its top-line growth.

It had earlier said the macro environment and the overhang of its creditor discussions would pressure results over the next few quarters.

Lumen has a network of fiber optic and copper cables and provides cloud-based communication services and IT solutions to businesses and users, helping them manage calls, messages and video meetings via a single interface.

The company posted net revenue of $3.29 billion in the first quarter, compared with analysts’ average estimate of $3.37 billion according to LSEG data, a 12% fall from a year earlier.

On an adjusted basis, it posted a loss of 4 cents per share in the first quarter, compared with earnings of $0.10 per share a year ago.

Revenue from Lumen’s nurture segment – which includes ethernet – was down 15%, to $777 million in the quarter. It posted revenues of $582 million from its harvest segment that includes voice products, down 17.6% over last year.

Lumen has said it continues to expect headwinds in these categories.

The firm plans to reduce its workforce by less than 7% and that would be completed by the second quarter, it said earlier this month.

In January, the company said it had signed a deal with a group of lenders that would push out its debt maturities to at least 2029 and provide it with access to more than $2 billion in fresh capital.

Lumen completed the sale of its EMEA business to London-based Colt Technology for $1.8 billion in November, as part of a digital transformation process necessary to hold out against bigger rivals in the long run.