Concerns about the future prospects for Lumen Technologies Inc. (NYSE: LUMN) have lingered.
Since my last writing, Lumen Technologies has embarked on an AI transformation and showed material progress. The company secured $8 billion in AI infrastructure orders, substantially improved its financial stability and flexibility. But it is still facing significant financial challenges, including continued EPS losses, debt burden, and heavy capital expenditure needs.
Lumen Technologies is undergoing a transformation driven by AI demand, with first-quarter earnings showing a shift from legacy services to AI infrastructure. The company's debt profile improved, refinancing loans to reduce interest expenses by $55 million annually, with most debt maturing in 2029 or later. Positive cash flow and reiterated 2025 guidance, with 2026 EBITDA expected to exceed $3.5 billion, indicate a promising growth trajectory.
LUMN's first-quarter performance has been cushioned by increases in North American Business Grow and Waves revenues. The company reiterates outlook for 2025.
Lumen Technologies, Inc. (NYSE:LUMN ) Q1 2025 Earnings Conference Call May 1, 2025 5:00 PM ET Company Participants Jim Breen - SVP, IR Kate Johnson - CEO Chris Stansbury - CFO Conference Call Participants Michael Rollins - Citi Batya Levi - UBS Jim Schneider - Goldman Sachs Nick Del Deo - MoffettNathanson Greg Williams - TD Cowen Frank Louthan - Raymond James Jonathan Chaplin - New Street Research Operator Greetings, and welcome to the Lumen Technologies' First Quarter 2025 Earnings Call. During the presentation, all lines will be in a listen-only mode.
Although the revenue and EPS for Lumen (LUMN) give a sense of how its business performed in the quarter ended March 2025, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.
Lumen (LUMN) came out with a quarterly loss of $0.13 per share versus the Zacks Consensus Estimate of a loss of $0.29. This compares to loss of $0.04 per share a year ago.
LUMN's first-quarter performance is likely to have been affected by secular headwinds in legacy business. Increasing uptake of PCF solutions bodes well.
Lumen (LUMN) has been upgraded to a Zacks Rank #2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.
Lumen appears to be a better investment option compared to Cogent at the moment.
Concerns about the future prospects for Lumen Technologies Inc. (NYSE: LUMN) have lingered.
Higher demand for LUMN's PCF solutions bodes well, but a debt-laden balance sheet and competition in the AI space remain overhangs.