Lumen Technologies, Inc. LUMN reported first quarter of 2025 adjusted loss (excluding special items) of 13 cents per share, which was significantly narrower than the Zacks Consensus Estimate of a loss of 29 cents. The company reported adjusted loss per share of 4 cents in the prior-year quarter.
Quarterly total revenues were $3.182 billion, down 3.3% year over year. However, the metric beat the Zacks Consensus Estimate by 2.7%. Higher revenues from North American Grow Business (up 9.9% year over year) and Wave’s revenues acted as tailwinds.
Driven by significant AI-fueled connectivity demand, Lumen secured a total of $8.5 billion in PCF deals in 2024. As AI needs surge, large companies across various industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce. Lumen has inked deals with various tech giants like Microsoft, Amazon, Google Cloud and Meta Platforms to provide the network capabilities for AI innovation. The company also remains focused on “cloudifying” telecom and driving the adoption of its network-as-a-service solutions.
Lumen also unveiled Fabric Ports, a new hardware innovation, allowing customers to manage their network infrastructure digitally and remotely. The port is designed to act as a link between the control center and the physical network. These ports support thousands of services on a single port compared with the legacy one-port-per-service model, dramatically lowering costs and enabling scalable growth. Fabric Ports provisioned and managed through rough the Lumen Digital platform rose 26% sequentially, indicating customer buy-in into Lumen’s new networking architecture.. The new Lumen Digital customer base grew 23% quarter over quarter.
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Following better-than-expected results, LUMN stock is up 2.3% in the pre-market trading session today. In the past year, shares of LUMN have gained 166.7% against the Diversified Communications Services industry’s decline of 8%. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Looking at LUMN’s Quarterly Details
By segment, Business revenues fell 3%year over year to $2.524 billion while revenues from Large Enterprises plunged 4% to $737 million. Mid-Market Enterprise revenues declined 11% to $513 million. Public Sector revenues were up 15% to $483 million. Revenues of North America’s Enterprise Channels were down 2% to $1.733 billion. The metric for Wholesale decreased 4% to $705 million.
Revenues from Mass Markets were down 6% year over year to $658 million.
The company added 39,000 Quantum fiber subscribers, taking the count to 1.1 million in the reported quarter.
Lumen Technologies, Inc. Price, Consensus and EPS Surprise
Lumen Technologies, Inc. Price, Consensus and EPS Surprise
Lumen Technologies, Inc. price-consensus-eps-surprise-chart | Lumen Technologies, Inc. Quote
In the first quarter, LUMN added 101,000 Fiber broadband-enabled locations. As of March 31, 2025, the total enabled locations in the retained states were 4.3 million. Previously, the company targeted achieving 500,000 enabled locations in 2025.
LUMN’s Q1 Margin Performance
Total operating expenses decreased 5% year over year to $3.075 billion.
Operating income was $107 million compared with $45 million in the year-ago quarter. Adjusted EBITDA (excluding special items) slipped to $929 million from $977 million for respective margins of 29.2% and 29.7%.
LUMN’s Cash Flow & Liquidity
In the first quarter, Lumen generated $1.095 billion of net cash from operations compared with $1.102 billion in the prior-year quarter.
Free cash flow (excluding cash special items) for the first quarter was $354 million compared with $518 million in the prior-year quarter.
As of March 31, 2024, the company had $1.9 billion in cash and cash equivalents with $17.334 billion of long-term debt compared with the respective figures of $1.889 billion and $17.494 billion as of Dec. 31, 2024.
Lumen completed a significant refinancing. With $2.4 billion of term loans refinanced, maturities have been pushed out to 2032, reducing annual interest expense by $55 million.
LUMN’s 2025 Outlook
For 2025, Lumen continues to expect adjusted EBITDA in the band of $3.2-$3.4 billion and capital expenditures to be between $4.1 billion and $4.3 billion. EBITDA in 2025 is expected to be below the levels of 2024, owing to the investments in transformation, along with higher startup costs for PCF sales and legacy revenue declines. LUMN expects EBITDA to significantly rebound in 2026 and be more than $3.5 billion. It also anticipates that the metric will register growth thereafter.
Free cash flow is expected to be between $700 million and $900 million. Management added that free cash flow would be lumpy from quarter to quarter as it moves through the PCF builds.
In the current year, it expects more than $250 million of run-rate cost benefit and $1 billion exiting 2027.
LUMN’s Zacks Rank
Lumen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Some of the Peers
AT&T T reported mixed first-quarter 2025 results with adjusted earnings missing the Zacks Consensus Estimate but revenues beating the same. The company witnessed solid wireless traction and customer additions, which were partially offset by lower demand for legacy voice and data services. AT&T recorded strong subscriber growth backed by a resilient business model and robust cash flow position, driven by a diligent execution of operational plans.
The company expects to continue investing in key areas of 5G & fiber and adjust its business according to the evolving market scenario to fuel long-term growth. Excluding non-recurring items, adjusted earnings improved to 51 cents per share from 48 cents a year ago. Adjusted earnings for the first quarter missed the Zacks Consensus Estimate by a penny. Quarterly GAAP operating revenues increased 2% year over year to $30.63 billion.
Rogers Communications Inc RCI reported first-quarter 2025 adjusted earnings of 69 cents per share, which missed the Zacks Consensus Estimate by 2.82% and remained flat year over year. Revenues of $3.47 billion missed the consensus mark by 1.19% and decreased 4.6% year over year. In domestic currency (Canadian dollar), adjusted earnings remained flat year over year at C$0.99 per share. Total revenues for Rogers Communications increased 1.5% year over year, reaching C$4.98 billion, driven by service revenue growth in Wireless and Media businesses.
T-Mobile US, Inc. TMUS, a leading wireless service provider, reported better-than-expected first-quarter fiscal 2025 results. Non-GAAP earnings of $2.58 per share surpassed the Zacks Consensus Estimate by 13 cents. Revenues surged 6.6% year over year to $20.88 billion. The figure surpassed the Zacks Consensus Estimate of $20.57 billion. Healthy traction in multiple verticals boosted the top line. In the fiscal first quarter, T-Mobile's total postpaid revenues rose 7.6% year over year to $13.59 billion, surpassing our estimate of $13.54 billion. T-Mobile witnessed its strongest first-quarter postpaid net addition.
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