CenturyLink (CTL) - Get CTL Report shares plunged past a two-decade low Monday after the wireless telecoms group asked the U.S. Securities and Exchange Commission to extend the deadline for filing its 2018 annual report.
CenturyLink said the delay in filing the 10-K was due to "material weakness" it found in internal controls linked to recording revenue at Colorado-based Level 3 Communications (LVLT) , the group it purchased for around $34 billion in 2017. CenturyLink also said there problems with "measure fair value of assets and liabilities, but said it doesn't expect those weaknesses to have a material impact on its February 13 earnings report.
"The principal reason for the delay is that recently identified material weaknesses in internal controls over the Company's revenue recording processes and the procedures for measuring fair value of assets and liabilities assumed in connection with the Level 3 Communications acquisition have created the need to conduct additional review and testing with respect to those processes prior to finalizing the assessment and the audits of the effectiveness of internal control over financial reporting as of December 31, 2018 and of the Company's financial statements as of and for the year ended December 31, 2018," the company said in an SEC filing published Monday.
CenturyLink shares were marked 7.2% lower following the filing and changing hands at $12.05 each, a move that extends their six-month decline to around 44.4% and takes the stock to its lowest levels in nearly 25 years.
Louisiana-based CenturyLink posted weaker-than-expected fourth quarter earnings last month, while slashing its dividend by more than half to just $1 a share, as it moves to cuts its overall debt load from around $35.4 billion.