Lumen Technologies, formerly known as CenturyLink, has been badly hit by the COVID-19 pandemic and has a “strong sense of urgency to drive growth” according to Jeff Storey, President and CEO of Lumen.
The service provider invests heavily in its core resources, including fiber optics, edge computing and the cloud-based Lumen platform, which brings together global networks, cloud edge computing, security literacy and collaboration services to drive long-term growth, Storey said during the success The company’s earnings report for the first quarter of 2021 on Wednesday evening.
“I want you to hear from me directly. We’re not happy and we’re focused on growth, ”said Storey, noting that COVID-19 has financial implications for business and the public sector that continue to challenge short-term revenues.
According to Storey, Lumen is ready to consider disposing of non-core assets in an effort to return to growth in the future. “We recognize that change is central to our customers who drive growth. When that is not the core, we are open and have the opportunity to talk about change,” he said.
CenturyLink announced in 2019 that it would “evaluate strategic alternatives” his consumer business back then.
Lumen from Monroe, La 71 percent of sales came from business services, a segment that has been stressed in recent quarters due to declining sales in small and medium-sized businesses and the impact of the COVID-19 pandemic on corporate buying trends.
Lumen began dividing its business segment, which includes its high bandwidth data services, managed services, and SD-WAN services, into two segments this quarter: Large Enterprise and Mid-Market Enterprise. Large Enterprise declined 3 percent to $ 937 million for the quarter, compared to revenue of $ 966 million a year ago. The middle class also fell 5.9 percent, from $ 761 million in the first quarter of 2020 to $ 716 this quarter.
More than 85 percent of U.S. businesses are within 5 milliseconds of latency from Lumen’s edge cloud facilities, and the company is well on track to meet its 95 percent goal of U.S. businesses by the end of 2021, said Storey.
In the corporate product categories, computing and application services were down 2.3 percent year-on-year, as was IP and data services, which were down 2.2 percent. However, fiber infrastructure services were up 1.5 percent year over year, according to Neel Dev, Lumen’s CFO. Dev said the lengthening of companies’ sales cycles in the current environment, a major customer disruption in the company’s International and Global Accounts Management (IGAM) segment, and multiple connectivity projects in the public sector were responsible for the declines in the company’s operations.
The service provider eliminated its SMB reporting segment in the first quarter.
Total revenue for the Lumen division was $ 3.56 billion for the first quarter, a decrease of 4.5 percent from the prior year figure of $ 3.73. The consumer segment, which Lumen renamed “Mass Markets” in the first quarter, generated 29 percent of the company’s sales.
Wholesale sales also continued to decline in the first quarter of 2021, down 4.1 percent from $ 969 million in the year-ago quarter to $ 929 million.
For the first quarter ended March 31, Lumen posted net income of $ 475 million compared to $ 314 million for the year-ago quarter. The company had total revenues of $ 5.03 billion and diluted earnings per share of 45 cents. That’s a 3.8 percent decrease from $ 5.23 billion and 35 cents per share in the first quarter of 2020.