MONROE, La. (AP) â¿¿ Telephone, cable and Internet service provider CenturyLink Inc. on Tuesday reported a drop in fourth-quarter net income and revenue as more customers opted to disconnect traditional phone service and use cell phones and issued a weak forecast for the first quarter. President and CEO Glen F. Post III also said that the company's pending purchase of fellow phone and Internet service provider Qwest Communications International Inc. made cost cutting a challenge during the quarter. The company also issued a weak The Monroe, La.-based company earned $225.2 million, or 74 cents per share, in the period ended Dec. 31. That was down 2 percent from a year-earlier profit of $230.2 million, or 77 cents per share. Excluding one-time charges, the company said it earned 76 cents per share in the latest period, down from year-earlier adjusted earnings of 95 cents per share. That missed the 78 cents per share expected by analysts polled by FactSet. Revenue fell 6 percent to $1.72 billion from $1.83 billion. Though the company earned more revenue from high-speed Internet customers, it lost revenue from telephone service, including long-distance calls, and network access. The results still were slightly better than the $1.71 billion forecast by analysts. In particular, the company saw its landline phone business continue to decline, though it shrank at a rate of 12 percent, which marked a gentler slowdown than the 15.8 percent decline it saw in the year-ago period. CenturyLink Inc. said last April that it intends to buy Qwest Communications for stock valued at roughly $10.6 billion at that time. The companies have so far won approval from 18 regulatory commissions, but still need approval from four more states, along with the Federal Communications Commission. The deal is expected to close in April, after which the combined company will serve nearly 16 million telephone customers and more than 5 million broadband customers.
For fiscal 2010, CenturyTel earned $947.7 million, or $3.13 per share. In 2009, it earned $647.2 million, or $3.23 per share. During 2010, the number of average shares outstanding grew 51 percent, diluting per-share earnings.Revenue for the year rose to $7.04 billion from $4.97 billion. For the current quarter, CenturyLink forecast earnings of 66 to 70 cents per share, not counting one-time charges, on revenue of $1.68 billion to $1.7 billion. Analysts polled by FactSet, on average, expect earnings of 82 cents per share on about $1.7 billion in revenue. In light of its pending Qwest purchase, CenturyLink would not provide an adjusted earnings forecast for 2011. However, it said it expects one-time charges throughout the year to trim per-share earnings by 49 to 55 cents, not counting any effects from the Qwest acquisition. For the year, it also expects revenue to fall 4 percent to 5 percent, again not counting the effects of the Qwest acquisition. This implies revenue between $6.69 billion and $6.76 billion. Analysts expect fiscal 2011 revenue of $6.67 billion, according to FactSet. Earlier Tuesday, CenturyLink signed a wireless resale deal with Qwest partner Verizon Wireless to start offering that company's equipment and service plans to its residential and small business customers. Also Tuesday, Qwest Communications said it swung to a fourth-quarter loss from year-ago profit, largely due to charges related to its pending takeover by CenturyLink and a decline in traditional phone revenue. CenturyLink shares fell $1.31, or 2.9 percent, to close at $44.83.