CenturyLink (CTL) Stock Gained Ahead of Earnings Release

CenturyLink (CTL) shares closed higher ahead of tomorrow's third quarter earnings release.
By Tony Owusu ,

NEW YORK (TheStreet) -- Shares of CenturyLink (CTL) - Get Report closed trading up by 0.28% to $28.49 on Tuesday, ahead of the release of the company's third quarter earnings results, due out tomorrow afternoon.

The Monroe, LA-based communications company is expected to report third quarter earnings of 70 cents per share on revenue of $4.6 billion.

Those totals are ahead of the 63 cents per share and $4.5 billion the company earned a year ago.

Analysts' consensus third quarter earnings estimates rose over the past month to 70 cents per share from 64 cents per share, while full year estimates have risen to $2.58 per share from $2.51 per share.

Separately, TheStreet Ratings team rates CENTURYLINK INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate CENTURYLINK INC (CTL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CENTURYLINK INC's earnings per share declined by 23.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CENTURYLINK INC turned its bottom line around by earning $1.35 versus -$0.43 in the prior year. This year, the market expects an improvement in earnings ($2.59 versus $1.35).
  • Even though the current debt-to-equity ratio is 1.40, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.44 is very low and demonstrates very weak liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Diversified Telecommunication Services industry average. The net income has significantly decreased by 25.9% when compared to the same quarter one year ago, falling from $193.00 million to $143.00 million.
  • You can view the full analysis from the report here: CTL
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