WASHINGTON (dpa-AFX) - CenturyLink Inc. (CTL) reported that its third-quarter GAAP net income increased to $270 million from $138 million for third quarter 2011. Earnings per share for third quarter 2012 was $0.43 compared to $0.22 for third quarter 2011.
Third quarter 2012 net income and earnings per share reflect $33 million ($0.05 per share) due to a favorable out-of-period adjustment to depreciation expense related to the fair value previously assigned to Embarq plant assets, an income tax benefit from the reversal of a valuation allowance and a gain on the sale of a non-operating investment, which were partially offset by severance, integration and retention costs associated with the Embarq, Qwest and Savvis acquisitions and severance associated with recent expense reduction initiatives.
Third quarter 2011 net income and earnings per share reflect after-tax integration, severance, and retention costs associated with the Embarq, Qwest and Savvis acquisitions of $70 million ($0.12 per share).
Adjusted net income for third quarter 2012 was $413 million compared to pro forma Adjusted net income of $377 million in third quarter 2011. Third quarter 2012 Adjusted earnings per share was $0.66 compared to pro forma Adjusted earnings per share of $0.61 in the year-ago period. Analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.
Operating revenues for third quarter 2012 were $4.57 billion compared to $4.60 billion in third quarter 2011. Sixteen analysts had consensus revenue estimate of $4.57 billion for the quarter. The decrease was driven by lower legacy services revenues primarily due to the impact of access line losses and lower access revenues partially offset by $58 million of incremental revenue contributions from the Savvis acquisition completed July 15, 2011 and increases in strategic revenues, primarily resulting from business customer demand for high-bandwidth data services and growth in high-speed Internet and Prism TV subscribers.
For the fourth-quarter, the company expects adjusted earnings per share to be in the range of $0.64 to $0.69, and operating revenue of $4.56 billion to $4.61 billion. Analysts expect the company to report earnings of $0.62 per share on revenues of $4.58 billion for the fourth-quarter.
The company raised its fiscal 2012 adjusted net income outlook to a range of $2.64 to $2.69 per share from $2.45 to $2.55 per share.
Operating revenue for fiscal 2012 is now expected to be in the range of $18.35 billion to $18.4 billion, compared to prior estimate of $18.3 billion to $18.4 billion.
Analysts expect the company to report earnings of $2.53 per share on revenues of $18.37 billion for fiscal 2012.
The company anticipates further improvement in top line revenues in 2013, currently expecting the annual rate of revenue decline for full year 2013 compared to full year 2012 to be in the -0.5% to -1.5% range. Additionally, the Company expects to reach top line revenue stabilization in 2014.
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