Lumen Technologies (NYSE:LUMN) Issues Earnings Results, Beats Estimates By $0.09 EPS

Key Points

• Lumen reported an adjusted loss of $0.14 per share, beating analyst expectations by $0.09, but revenue of about $2.71 billion fell short of the $2.73 billion consensus.
• Strategic revenue grew 10% year over year to $1.28 billion, reaching 55% of business revenue; digital revenue also rose sharply, reflecting growing demand for network and digital services.
• Pressure remains from legacy business declines: free cash flow was negative $76 million, though Lumen reaffirmed its 2026 adjusted EBITDA guidance and still expects a return to business revenue growth in 2028.

Lumen Technologies (NYSE:LUMN - Get Free Report) issued its earnings results on Wednesday. The technology company reported ($0.14) earnings per share for the quarter, topping analysts' consensus estimates of ($0.23) by $0.09, reports. The firm had revenue of $2.71 billion for the quarter, compared to analyst estimates of $2.73 billion.

Here are the key takeaways from Lumen Technologies' conference call:

• Strategic sales and revenue accelerated: Strategic sales rose 30% year over year, while strategic revenue grew 10% to $1.28 billion and reached 55% of business revenue. Lumen added $700 million in PCF contracts, bringing cumulative deals to more than $13.5 billion.
• Digital services are gaining traction: Digital revenue increased 86.7% to $56 million, and NaaS adoption grew across customers, ports, and services. Management sees opportunities to add high-margin digital services to its combined Intelligent Internet business, which includes more than 100,000 ports and over $1 billion in revenue.
• Legacy declines continue to weigh on results: Total business revenue fell 4.5% year over year, while free cash flow was negative $76 million in the quarter. Total revenue of $2.72 billion included $27 million in government support payments that did not benefit Adjusted EBITDA.
• Full-year guidance was reaffirmed, but revenue growth remains a longer-term goal: Lumen expects 2026 Adjusted EBITDA of $3.1–$3.3 billion and free cash flow of $1.9–$2.1 billion, excluding specified items. Management continues to model a return to total business revenue growth in 2028.
• Copper decommissioning is intended to generate cash while reducing legacy costs: Lumen estimates $1–$1.5 billion in pre-tax net proceeds from copper over five years, with the initial four states representing about a quarter of its footprint. The proceeds depend on factors including customer migration, regulatory approvals, recovery costs, and market conditions.

Lumen Technologies Stock Performance

NYSE:LUMN traded down $0.49 on Thursday, hitting $3.98. The stock had a trading volume of 25,232,071 shares, compared to its average volume of 13,732,360. The stock has a market cap of $4.10 billion, a P/E ratio of -3.90 and a beta of 1.94. Lumen Technologies has a 1 year low of $3.84 and a 1 year high of $11.43. The firm's fifty day simple moving average is $5.66 and its two-hundred day simple moving average is $7.19.

Lumen Technologies News Summary

Here are the key news stories impacting Lumen Technologies this week:

• Positive Sentiment: Strategic revenue grew about 10% and now accounts for 55% of business revenue, supported by AI demand and adoption of Lumen’s Network-as-a-Service platform. Why Lumen Technologies Sank Today
• Positive Sentiment: Adjusted loss of $0.14 per share was better than analyst expectations, and Lumen reaffirmed its full-year adjusted EBITDA guidance. Lumen Q3 Earnings Call Highlights
• Negative Sentiment: Revenue was about $2.71 billion, below the roughly $2.73 billion consensus estimate, while overall sales declined year over year. The shortfall underscored ongoing pressure in Lumen’s legacy business. Lumen Reports Q3 Loss, Lags Revenue Estimates
• Negative Sentiment: Free cash flow turned negative in the quarter, adding to investor concerns despite the strategic-revenue gains and reaffirmed EBITDA outlook. Lumen Q3 Earnings Call Highlights
• Negative Sentiment: Goldman Sachs and Wells Fargo each cut their price target to $5, while maintaining neutral or equal-weight ratings—signaling reduced expectations for the shares. Goldman Sachs rating information Wells Fargo rating information

Analyst Ratings Changes

Several research firms have weighed in on LUMN. The Goldman Sachs Group lowered their price objective on shares of Lumen Technologies from $7.25 to $5.00 and set a "neutral" rating on the stock in a report on Thursday. TD Cowen decreased their target price on shares of Lumen Technologies from $9.00 to $8.00 and set a "hold" rating for the company in a research report on Thursday. Moffett Nathanson upgraded shares of Lumen Technologies from a "sell" rating to a "neutral" rating and set a $4.00 target price on the stock in a report on Friday, October 30th. Wells Fargo & Company cut their price target on Lumen Technologies from $7.50 to $5.00 and set an "equal weight" rating for the company in a research note on Thursday. Finally, Wall Street Zen raised Lumen Technologies from a "sell" rating to a "hold" rating in a report on Sunday, August 9th. Ten investment analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the company presently has a consensus rating of "Reduce" and an average target price of $6.66.

Lumen Technologies Company Profile

Lumen Technologies, Inc is a communications and technology company that provides network, connectivity, cloud, cybersecurity and managed services primarily to businesses, government organizations and wholesale customers. Its offerings include fiber-based internet and data transport, software-defined networking, network security, unified communications, voice services, edge computing and related information technology solutions.

The company operates one of the largest enterprise fiber networks in the United States and also serves customers internationally through its global network and wholesale operations.

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