![]() Wait for the enterprise business to grow to a point where it can afford to dump the consumer business at any price. The answer is obvious that currently this is not the case, which leaves Lumen with two options: ![]() The most obvious questions are: How much can you sell a declining business for? Will that money be able to replace the missing revenues or, more precisely, to reduce interest expenses by a meaningful amount and compensate for the revenue loss? An internal review was conducted to determine the best option of monetizing this asset, but no announcement has been made since then. What should the company do with the consumer business? The simplest move would be selling it or spinning it off. He answered:Īs we can see, the consumer-related sales account for 25% (38% if we add the SMB) of total revenue. This is due to the strong association (especially in the U.S.) between the name "CenturyLink" and that kind of business.įiber-based companies sell for much higher multiples, so if Lumen's revenue stream actually comes from different businesses (including the much more profitable fiber-based enterprise one) it would at least deserve a re-rating.ĭuring the most recent conference call, an analyst asked Storey why he thinks the market has this wrong perception. This is absolutely true: if we look at the market multiples, Lumen is selling as if the whole company would still be in the old copper-lines telephone business. Jeffrey Storey, Lumen's CEO, has recently increasingly communicated the discomfort of seeing the company being valued by the market as a pure old-fashioned communication firm. What, then, is really new? It's the way Lumen hopes to be perceived by the market. The company has been working on those for several years. These topics are of course important and will be even more important in the next decade, but they aren't new. The announcement contains (as with any rebranding) a lot of shiny words and concepts, as leading the 4H Industrial Revolution, Adaptive Networking, Edge Cloud agility, etc. Warning! GuruFocus has detected 6 Warning Signs with LUMN. The word "lumen" comes from Latin, meaning "light," which is a clear reference to the physical substrate of a fiber communication infrastructure. 14, CenturyLink announced it is rebranding as Lumen Technologies Inc. That’s noteworthy considering other big fiber operators like AT&T and Frontier Communications have reported that they remain on track for their own fiber buildout goals.On Sept. However, “the company seems likely to miss its full-year enablement target of 1 million … and its goal of exiting the year at a 1.5-2 million run-rate appears out of reach,” the analysts noted. ![]() ![]() The analysts noted that Lumen lit up 210,000 locations with fiber in its third quarter, just up from the 205,000 it notched during its second quarter. Supply chain, labor, and permitting hurdles have all weighed on enablements,” the financial analysts at MoffettNathanson, a division of SVB Securities, wrote in a note to investors following the release of Lumen’s third quarter results this week. “Lumen is deploying significant capital toward its FTTH upgrade program but is having challenges ramping the deployment at the pace it expected. But many analysts don’t think that’s going to happen. Lumen Technologies had hoped to build fiber connections to 1 million locations by the end of this year. Light Reading reports on Lumen (aka CenturyLink)…
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