CenturyLink sees Prism TV adds in Q4, but earnings sink 52%

CenturyLink (NYSE: CTL) added 16,000 Prism TV subscribers to it customer roles in the fourth quarter, reporting 90 percent of the new subscribers added high-speed Internet as well. Nearly 50 percent were newcomers to CenturyLink service.

The company, however, had a somewhat mixed quarter as it reported fourth quarter earnings that were 52 percent off a year earlier. CenturyLink said one-time charges offset contributions from Qwest and Savvis, a pair of acquisitions in 2011 that added $2.99 billion to the company's bottom line for the quarter.

By the numbers, CenturyLink said it had net income of $109 million, or 18 cents a share, down from $225 million, or 74 cents share in the fourth quarter of 2010. Adjusted earnings were 55 cents per share, missing analysts expected 61 cents per share. The telco beat estimates on operating revenue, reporting it rose to $4.65 billion from $1.72 billion a year ago. Wall Street had expected revenue of $4.62 billion.

CenturyLink said its full year net income fell to $573 million, or $1.07 per share, down some 40 percent from 2010 when it reported earnings of $948 million, or $3.13 per share, in 2010. Revenue rose to $13.33 billion from $4.98 billion.

For the first quarter, the company was in line with analyst estimates, expecting adjusted earnings of 57 cents to 63 cents per share on revenue of $4.58 billion to $4.64 billion for the first quarter.

For 2012, CenturyLink was short of analyst expectations for profit but in line for revenues. It forecast adjusted profits of $2.25 to $2.45 per share and $18.2 billion to $18.4 billion in revenue, compared to expectations of $2.55 per share on $18.19 billion in revenue.

CenturyLink offered Prism TV in five new markets in the quarter, and it now passes more than 1 million homes; its penetration rate stands at 7 percent of homes passed.

During the company's earnings call, CEO Glen Post said the company was focused on expanding the service's footprint and growing its subscriber base.

"We're encouraged by the 30 percent growth in Prism TV subscribers during the fourth quarter as we ended 2011 with over 70,000 Prism TV subscribers," Post said. "We also continue to see Prism TV have a positive impact on churn and line loss trends... We also look forward to launching Prism TV in our first legacy Qwest market in the coming months."

The company said it expects to spend "somewhere between $80 million to $120 million" on Prism and video in 2012.

CenturyLink closed at $39.26 Friday. Its shares have traded in a 52-week range of $31.16 to $43.49.

For more:
- see this release
- see this earnings call transcript

Special Report: IPTV 4Q 2011 earnings

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