CenturyLink Inc. (NYSE: CTL) is in serious trouble, with shares hitting a 52-week low. Shares are down more than 20% on Thursday, yet still worth almost $21 billion in market capitalization. The Louisiana-based telecom and communications provider announced that it was lowering its dividend payments by about 26%. We would ask that the last Wall St. analyst to leave the room here please turn out the lights.
The dividend payout each quarter is dropping, down to $0.54 per share from $0.725 per share. This is on the heels of lackluster earnings for its fourth quarter. The company posted adjusted earnings of $0.67 per share on revenues of $4.58 billion. Earnings were deemed soft, but sales were basically on the mark.
Enterprise network market revenues rose by 5.7% to $671 million, and enterprise data hosting rose by 12.7% to $292 million. The problem is that its Wholesale Markets revenue was down 5.5% to $908 million in the fourth quarter. Another issue is that the larger Regional Markets revenues fell 3.9% year-over-year to $2.445 billion.
Guidance was put at $0.67 to $0.72 per share and $4.46 billion to $4.51 billion for the first quarter. The 2013 outlook was put at a drop of 0.5% to 1.5% to $18.1 to $18.3 billion, with earnings of $2.50 to $2.70 per share.
Management's new share repurchase program of up to $2.0 billion is just not enough to move the needle. The company ended 2012 with $211 million in cash and equivalents.
We would note that the new dividend yield is now almost 6.6% after the drop of 20% in the stock to $32.95. The prior 52-week range was $36.52 to $43.43. So, here is that list of downgrades we have seen today from Wall St. research shops:
Ameriprise Financial downgraded CenturyLink to Sell from Buy.
Citigroup cut it to Neutral from Buy.
J.P. Morgan cut it to Neutral from Overweight.
Macquarie cut it to Underperform from Neutral.
Nomura cut it to Reduce from Buy.
Raymond James cut it to Market Perform from Strong Buy.
Will the last analyst leaving this room please turn out the lights?
Filed under: 24/7 Wall St. Wire, Analyst Calls, Dividends & Buybacks, Telecom & Wireless Tagged: CTL, featured