LUMN - Lumen: A High-Risk High-Reward Play (Rating Upgrade)
2024-02-13 07:39:03 ET
Summary
- Lumen reports better than expected earnings for Q4 and submitted a positive free cash flow guidance for FY 2024.
- Despite a decline in revenues due to asset sales, Lumen's fiber broadband operations showed solid growth.
- Lumen's high debt remains a challenge and may impact the company's prospects and share valuation.
Lumen Technologies ( LUMN ) submitted a much better than expected earnings sheet for the fourth quarter and managed to deliver a revenue beat as well. Lumen reported a large decline in its revenue base in the fourth quarter, which reflects the impact of asset sales that are part of the company's strategy to shrink its balance sheet. Lumen still has to deal with a ton of debt which I believe will be a weight for the telecom's shares at least for the foreseeable future. Lumen sees positive free cash flow in FY 2024 which I believe was a major positive take-away from the earnings release. If Lumen were to return to growth and, as an example, exceeded its free cash flow guidance in FY 2024, this could increase the confidence in the company’s turnaround!...
Lumen: A High-Risk, High-Reward Play (Rating Upgrade)