While Adjusted EBITDA was down again in Q1 '22, LUMN's EBITDA Margin has been relatively stable over the past 5 quarters, running from 41% to 41.6%, excluding CAF subsidies.ĬAF 2 - the Connect America Fund, is a part of the Universal Service High-Cost program – is an FCC program designed to expand access to voice and broadband services for areas where they are unavailable. Large Enterprise, which is a longer sales cycle, had the biggest declines in Q1 '22, at 5,8%, while International GAM fell 2.5%, and Mid-Market Enterprise fell 1.7%. LUMN's legacy Voice & Other products continue to be less important in its Enterprise Channel mix, with Core products rising to 79% of revenue, vs. Like many other companies, LUMN's Enterprise and Mass Markets segments are managing through supply chain constraints, and experienced year-over-year and sequential declines in Q1 2022: These changes include the creation of new product categories: Fiber Broadband, Other Broadband, and Voice and Other, which now includes support revenue.įiber Broadband rose ~19%, whereas Other Broadband fell ~6%, and Voice & Other fell ~22%: Management made previously announced changes to the product categories in Q1 2022 to better align financial reporting with how management and investors view the business. Hidden Dividend Stocks Plus Segments & Categories However, Net Income rose 26%, and Adjusted EPS rose 34%. Q1 '22 revenue fell -7%, Adjusted EBITDA was down -11.3%, while Free Cash Flow slipped just -1.36%. LUMN hired a new CFO in April 2022, Chris Stansbury, an exec with 30 years financial experience at companies such as Arrow, Hewlett Packard, and Pepsi. LUMN has minimal debt maturing in 2022, $94M, whereas in 2023 it will have $949M maturing, followed by $1.125B in 2024, and ~$4B in 2025. Management reduced net debt by over $450M in Q1 '22. Interest expense continued to decline in Q1 '22, dropping 9.5%, after an 8% decline in 2021. It declined by 6.7% in 2021, but had a ~3% rise in Q1 '22. LUMN's debt stood at $28.4B as of 3/31/22, ~19% lower than its 2018 total. Management has expanded fiber optics, multi-gig services, and other architectures in an accelerated pace, which it sees as positioning LUMN for growth coming from Virtual Reality, AR, gaming, work and learn from home and other high-bandwidth services.Īs we've written in our previous articles on LUMN, another of its big challenges is working down its debt load, which was $35B-plus in 2018. ( NYSE: LUMN) has been moving into other business offerings over the past few years in order to fight the attrition associated with traditional landline service. Like many other traditional telecoms, Lumen Technologies, Inc.
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