Q2 2010 Earnings Call
August 04, 2010 11:30 am ET
Tony Davis - Vice President of Investor Relations
Glen Post - Chief Executive Officer, President and Director
R. Ewing - Chief Financial Officer and Executive Vice President
Karen Puckett - Chief Operating Officer and Executive Vice President
Christopher Larsen - Piper Jaffray Companies
Christopher King - Stifel, Nicolaus & Co., Inc.
Batya Levi - UBS Investment Bank
Frank Louthan - Raymond James & Associates
Timothy Horan - Oppenheimer & Co. Inc.
Phil Cusick - Macquarie Research
Scott Goldman - Bear Stearns
David Coleman - RBC Capital Markets Corporation
Previous Statements by CTL
» CenturyTel Q1 2010 Earnings Call Transcript
» CenturyLink and Qwest Agree to Merge Call Transcript
» CenturyTel, Inc. Q4 2009 Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to CenturyLink Second Quarter 2010 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Tony Davis, Vice President of Investor Relations. Mr. Davis, you may begin.
Thank you, Sayeed. Good morning, everyone, and welcome to our call today to discuss CenturyLink's second quarter 2010 results released earlier this morning.
For those of you viewing through the Internet, the slide presentation we will be reviewing during the prepared remarks portion of today's call is available on CenturyLink's IR website at ir.centurylink.com or the Investor Relations section of our corporate website at www.centurylink.com. Unless otherwise noted in the press release, the slide presentation or in our remarks this morning, the second quarter 2010 results discussed during our call today include the effect of the Embarq acquisition completed July 1, 2009. At the conclusion of our prepared remarks today, we will open the call for Q&A.
Turning to Slide 2. Slide 2 contains our Safe Harbor language for your information. We will be making certain forward-looking statements today, particularly as they pertain to guidance for our third quarter and full year 2010, selected information regarding 2010, the Embarq integration and the pending acquisition of Qwest and other outlooks in our business. Please review our Safe Harbor language found in our press release and in our SEC filings, which describe factors that could cause our actual results to differ materially from those projected by us and our forward-looking statements.
Turning to Slide 3. As a result of the recently announced Qwest transaction, we are required to provide the additional information shown on this slide disclosing matters relevant to that transaction. We ask that you review this additional information, which is in our press release, this slide presentation and our SEC filings.
Now moving to Slide 4. We ask that you note that our earnings release issued earlier this morning and the slide presentation and remarks made during this call may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available in our earnings release and on our website at www.centurylink.com.
Turning to Slide 5. Your host for today's call is Glen Post, Chief Executive Officer and President of CenturyLink. Joining Glen on our call today is Stewart Ewing, CenturyLink's Chief Financial Officer. Also available during the question-and-answer period of today's call is Karen Puckett, CenturyLink's Chief Operating Officer.
Our call today will be accessible for telephone replay through August 10, 2010, and accessible for webcast replay through August 24, 2010. For anyone listening to a taped or webcast replay of this call, or for anyone reviewing a written transcript of today's call, please note that all information presented is current only as of August 4, 2010, and should be considered valid only as of that date, regardless of the date listened to or reviewed.
As you turn to Slide 6, I will now turn the call over to your host today, Glen Post. Glen?
Thank you, Tony. We appreciate you joining us today as we discuss CenturyLink's second quarter 2010 operating results and selected operational updates, as well as our guidance for the remainder of 2010.
We achieved solid results for the quarter as we realized operating revenues near the upper end of previous guidance and diluted earnings per share that exceeded previous guidance and first call consensus for the quarter. We also achieved solid high-speed Internet additions and continue to see significant improvement in year-over-year access line losses, primarily driven by improved line loss results in the legacy Embarq markets. The Integration of Embarq continues to proceed well, and we continue to make good progress obtaining the approvals necessary to complete the pending Qwest transaction, another transformative acquisition for CenturyLink.
Moving to Slide 7 in the deck. We are pleased to report solid financial and operating results for the second quarter. Operating revenues of $1.77 billion for the quarter, near the top end of our previous guidance range for the second quarter. There were several factors that contributed to this revenue performance for the quarter. First, we experienced lower access line loss during the quarter that we had previously anticipated. We also continue to see revenue growth from high-speed Internet customer additions, and we experienced higher-than-anticipated data circuit demand from wireless providers, adding capacity to their networks to handle increasing wireless data traffic.
Diluted earnings per share excluding nonrecurring items is $0.88 per share for the quarter, an increase of 6% over the second quarter 2009. This is a $0.03 per share above the top end of our previous guidance and first call consensus of $0.85 per share. Several factors contributed to this outperformance during the second quarter. First, the revenue performance that I outlined a moment ago. Second, we continue to achieve synergies from the Embarq acquisition earlier than we originally anticipated. And finally, our employees continue to do an excellent job in containing operating costs across our business.