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From: FUBHO11/9/2017 11:29:47 AM
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Weaker Together? Level 3 Acquisition Hasn’t Helped CenturyLink Yet

ByTeresa Rivas
Nov. 9, 2017 10:11 a.m. ET

CenturyLink ( CTL) is tumbling today, falling after reporting third-quarter earnings.

The telecom company said that it earned 42 cents a share on revenue that fell 7.9% year over year to $4.03 billion. Both metrics missed the mark, as analysts were looking for earnings of 45 cents a share on revenue of $4.06 billion.

Analysts are weighing in on the stock today, and not surprisingly most of them are fairly subdued about the results.

Cowen & Co.'s Gregory Williams reiterated a Market Perform rating, although he lowered his price target $6 to $18:

CTL posted downside results and expects to miss full year guidance across the board. Level 3 reiterated EBITDA/FCF guide but NA CNS Ent. Growth of just 0.1% Q/Q increases execution risk as the 1H17 bookings are clearly not materializing. Potential synergy raises may be offset by deteriorating fundamentals. Mgmt. high confidence in the div will take many qtrs. to prove, keeping us on the sidelines.

Raymond James's Frank Louthan IV reiterated an Underperform rating on the stock:

In the near term we believe numbers could be at risk from sales disruptions at the companies leading into the deal and in the 12 months following the close. We are lowering our estimates and expect Street numbers to approach our expectations.

SunTrust Robinson Humphrey's Greg Miller reiterated a Hold rating on the stock but lowered his price target $6 to $19:

CTL and LVLT both reported slightly weaker-than-expected 3Q17 results a week after officially closing their merger. Management affirmed prior synergy targets as well as a commitment to the dividend, though we believe legitimate concern remains regarding future payouts. While we believe the combined company has the potential to reignite revenue growth and deliver synergies required to better cover the dividend obligation, we await evidence of integration/turnaround progress before turning more constructive.CenturyLink is down 9.2% to $14.76 in recent trading, and has fallen 37.7% this year.
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