LUMN - Lumen Technologies: The Turnaround Continues

2024-02-12 03:11:03 ET

Summary

• Lumen Technologies reported a $3 billion drop in revenue and a $9.5 billion operating loss in 2023.
• The company's balance sheet saw a radical downsizing, with a $10 billion goodwill write-off and virtually zero shareholder equity.
• Lumen's adjusted EBITDA is expected to decline in 2024, but free cash flow is projected to rise to $200 million.

Last week, Lumen Technologies ( LUMN ) reported its fourth quarter and full-year earnings results . The results come as the company is in the midst of a multi-year turnaround strategy and nearing completion of a recently revised transaction support agreement to defer major debt maturities to 2029. Lumen’s debt continues to be priced all over the place, but mainly in distressed territory, with some yields exceeding 40%. I’m currently rating both Lumen stock and debt a “hold” as I wait for further information on the company’s debt restructuring, but the results from 2023 and the outlook for 2024 should give investors reasons to be optimistic....

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