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Lumen Posts Narrower-Than-Expected Q3 Loss, Revenues Down Y/Y
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Key Takeaways
Lumen posted a narrower Q3 adjusted loss of $0.20 per share, beating consensus expectations.
Q3 revenues fell 4.2% year over year to $3.09 billion but topped analyst estimates by 1.4%.
Lumen secured $10 billion in PCF deals and grew NaaS customers past 1,500.
Lumen Technologies, Inc. (LUMN - Free Report) reported a third-quarter 2025 adjusted loss (excluding special items) of 20 cents per share, which was significantly narrower than the Zacks Consensus Estimate of a loss of 31 cents. The company reported adjusted loss per share of 13 cents in the prior-year quarter.
Quarterly total revenues were $3.087 billion, down 4.2% year over year but beat the Zacks Consensus Estimate by 1.4%.
Driven by significant AI-fueled connectivity demand, Lumen secured a total of $10 billion in PCF deals. As AI needs surge, large companies across various industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce. Increasing adoption of its network-as-a-service (NaaS) solutions bodes well. Lumen highlighted that it has surpassed 1,500 customers for its NaaS platform. The company considers Internet on Demand, or IoT Offnet, to boost digital service sales and revenue growth. Lumen also noted that its connected ecosystem strategy was “off to a great start” with recent deals with Palantir, Commvault and QTS.
Among notable highlights, in the current year, LUMN remains on track to achieve $350 million of run-rate cost benefit in 2025. It continues to expect $1 billion of run-rate cost benefit exiting 2027. The company remains highly optimistic regarding the sale of Mass Markets' fiber-to-the-home business, including Quantum Fiber, across 11 states to AT&T (T - Free Report) for $5.75 billion in cash. The transaction is now expected to close in early 2026, pending regulatory approvals and customary closing conditions.
Image Source: Zacks Investment Research
Following the results announcement, LUMN stock is down 7.5% in the pre-market session today. In the past year, shares of LUMN have jumped 47.8% compared with the Diversified Communications Services industry’s growth of 5.9%.
Looking at LUMN’s Quarterly Details
By segment, Business revenues fell 3.2% year over year to $2.456 billion, while revenues from Large Enterprises declined 1.2% to $752 million. Mid-Market Enterprise revenues declined 10% to $488 million. Public Sector revenues were up 11.2% to $478 million. Revenues of North America’s Enterprise Channels were down 0.9% to $1.718 billion. The metric for Wholesale decreased 7.6% to $658 million due to declines in voice, managed services and VPN.
Revenues from Mass Markets were down 7.7% year over year to $631 million.
Lumen Technologies, Inc. Price, Consensus and EPS Surprise
The company added 39,000 Quantum fiber subscribers, taking the count to 1.2 million in the reported quarter.
In the third quarter, LUMN added 122,000 fiber broadband-enabled locations. As of Sept. 30, 2025, the total enabled locations in the retained states were 4.5 million.
LUMN’s Q3 Margin Performance
Total operating expenses increased 3% year over year to $3.203 billion.
Operating loss was $116 million against an operating income of $126 million in the year-ago quarter. Adjusted EBITDA (excluding special items) slipped to $787 million from $899 million for respective margins of 25.5% and 27.9%.
LUMN’s Cash Flow & Liquidity
In the third quarter, Lumen generated $2.511 billion of net cash from operations compared with $2.032 billion in the prior-year quarter.
Free cash flow (excluding cash special items) was $1.661 billion compared with $1.198 billion in the prior-year quarter.
As of Sept. 30, 2025, the company had $2.4 billion in cash and cash equivalents with $17.578 billion of long-term debt compared with the respective figures of $1.6 billion and $17.565 billion as of June 30, 2025.
Lumen completed an additional $2.4 billion debt refinancing and subsequent term loan repricing, reducing annual interest expense by $135 million, year to date.
LUMN’s 2025 Outlook
For 2025, adjusted EBITDA is predicted to be between $3.2 billion and $3.4 billion, with LUMN expecting to report numbers near the high end of the range. Adjusted EBITDA includes the impact from public sector harvest normalization, higher costs for PCF sales and legacy revenue declines. LUMN expects EBITDA to rebound in 2026.
Capital expenditures are estimated to be between $4.1 billion and $4.3 billion, with LUMN expecting to report the numbers near the low end of the range. This is mainly due to project timings.
Free cash flow is now anticipated to be between $1.2 billion and $1.4 billion. The guidance lift primarily stems from $400 million tax refund, lower capex, improved adjusted EBITDA performance and reduced interest expense.
AT&T reported modest third-quarter 2025 results with healthy mobility and broadband demand trends. However, both adjusted earnings and revenues missed the respective Zacks Consensus Estimate. Excluding non-recurring items, adjusted earnings remained flat at 54 cents per share. Adjusted earnings for the third quarter missed the Zacks Consensus Estimate by a penny.
Quarterly GAAP operating revenues increased 1.6% year over year to $30.71 billion, largely due to higher Mobility service and equipment sales, Consumer Wireline and Mexico revenues, partially offset by lower Business Wireline revenues. The top line missed the consensus mark of $30.96 billion. AT&T recorded strong subscriber growth backed by a resilient business model and robust cash flow position, driven by a diligent execution of operational plans. AT&T expects to continue investing in key areas of 5G and fiber and adjust its business according to the evolving market scenario to fuel long-term growth.
Rogers Communications Inc (RCI - Free Report) reported third-quarter 2025 adjusted earnings of 99 cents per share, which beat the Zacks Consensus Estimate by 7.61% but decreased 3.5% year over year. Revenues of $3.88 billion beat the consensus mark by 1.16% and increased 4.3% year over year. In domestic currency (Canadian dollar), adjusted earnings declined 3.5% year over year to C$1.37 per share. Total revenues increased 4.3% year over year to C$5.35 billion, primarily driven by growth in the Media businesses. As of Sept. 30, 2025, Rogers Communications had C$6.4 billion of available liquidity, including C$1.5 billion in cash and cash equivalents and C$4.9 billion available under bank and other credit facilities.
T-Mobile US, Inc. (TMUS - Free Report) , a leading wireless service provider, reported impressive third-quarter 2025 results, with both top and bottom lines beating the respective Zacks Consensus Estimate. This Bellevue, WA-based wireless service provider reported a top-line expansion backed by industry-leading postpaid customer growth. T-Mobile follows a multi-layer approach to 5G, with dedicated standalone 5G deployed nationwide across 600 MHz, 1.9 GHz and 2.5 GHz bands.
Net sales were $21.95 billion, up from $20.16 billion in the year-ago quarter, driven by solid growth in service revenues. The top line beat the consensus estimate of $21.78 billion. Adjusted EPS was $2.59 per share, which beat the Zacks Consensus Estimate of $2.42.
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Lumen Posts Narrower-Than-Expected Q3 Loss, Revenues Down Y/Y
Key Takeaways
Lumen Technologies, Inc. (LUMN - Free Report) reported a third-quarter 2025 adjusted loss (excluding special items) of 20 cents per share, which was significantly narrower than the Zacks Consensus Estimate of a loss of 31 cents. The company reported adjusted loss per share of 13 cents in the prior-year quarter.
Quarterly total revenues were $3.087 billion, down 4.2% year over year but beat the Zacks Consensus Estimate by 1.4%.
Driven by significant AI-fueled connectivity demand, Lumen secured a total of $10 billion in PCF deals. As AI needs surge, large companies across various industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce. Increasing adoption of its network-as-a-service (NaaS) solutions bodes well. Lumen highlighted that it has surpassed 1,500 customers for its NaaS platform. The company considers Internet on Demand, or IoT Offnet, to boost digital service sales and revenue growth. Lumen also noted that its connected ecosystem strategy was “off to a great start” with recent deals with Palantir, Commvault and QTS.
Among notable highlights, in the current year, LUMN remains on track to achieve $350 million of run-rate cost benefit in 2025. It continues to expect $1 billion of run-rate cost benefit exiting 2027. The company remains highly optimistic regarding the sale of Mass Markets' fiber-to-the-home business, including Quantum Fiber, across 11 states to AT&T (T - Free Report) for $5.75 billion in cash. The transaction is now expected to close in early 2026, pending regulatory approvals and customary closing conditions.
Image Source: Zacks Investment Research
Following the results announcement, LUMN stock is down 7.5% in the pre-market session today. In the past year, shares of LUMN have jumped 47.8% compared with the Diversified Communications Services industry’s growth of 5.9%.
Looking at LUMN’s Quarterly Details
By segment, Business revenues fell 3.2% year over year to $2.456 billion, while revenues from Large Enterprises declined 1.2% to $752 million. Mid-Market Enterprise revenues declined 10% to $488 million. Public Sector revenues were up 11.2% to $478 million. Revenues of North America’s Enterprise Channels were down 0.9% to $1.718 billion. The metric for Wholesale decreased 7.6% to $658 million due to declines in voice, managed services and VPN.
Revenues from Mass Markets were down 7.7% year over year to $631 million.
Lumen Technologies, Inc. Price, Consensus and EPS Surprise
Lumen Technologies, Inc. price-consensus-eps-surprise-chart | Lumen Technologies, Inc. Quote
The company added 39,000 Quantum fiber subscribers, taking the count to 1.2 million in the reported quarter.
In the third quarter, LUMN added 122,000 fiber broadband-enabled locations. As of Sept. 30, 2025, the total enabled locations in the retained states were 4.5 million.
LUMN’s Q3 Margin Performance
Total operating expenses increased 3% year over year to $3.203 billion.
Operating loss was $116 million against an operating income of $126 million in the year-ago quarter. Adjusted EBITDA (excluding special items) slipped to $787 million from $899 million for respective margins of 25.5% and 27.9%.
LUMN’s Cash Flow & Liquidity
In the third quarter, Lumen generated $2.511 billion of net cash from operations compared with $2.032 billion in the prior-year quarter.
Free cash flow (excluding cash special items) was $1.661 billion compared with $1.198 billion in the prior-year quarter.
As of Sept. 30, 2025, the company had $2.4 billion in cash and cash equivalents with $17.578 billion of long-term debt compared with the respective figures of $1.6 billion and $17.565 billion as of June 30, 2025.
Lumen completed an additional $2.4 billion debt refinancing and subsequent term loan repricing, reducing annual interest expense by $135 million, year to date.
LUMN’s 2025 Outlook
For 2025, adjusted EBITDA is predicted to be between $3.2 billion and $3.4 billion, with LUMN expecting to report numbers near the high end of the range. Adjusted EBITDA includes the impact from public sector harvest normalization, higher costs for PCF sales and legacy revenue declines. LUMN expects EBITDA to rebound in 2026.
Capital expenditures are estimated to be between $4.1 billion and $4.3 billion, with LUMN expecting to report the numbers near the low end of the range. This is mainly due to project timings.
Free cash flow is now anticipated to be between $1.2 billion and $1.4 billion. The guidance lift primarily stems from $400 million tax refund, lower capex, improved adjusted EBITDA performance and reduced interest expense.
LUMN’s Zacks Rank
Lumen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Some of the Peers
AT&T reported modest third-quarter 2025 results with healthy mobility and broadband demand trends. However, both adjusted earnings and revenues missed the respective Zacks Consensus Estimate. Excluding non-recurring items, adjusted earnings remained flat at 54 cents per share. Adjusted earnings for the third quarter missed the Zacks Consensus Estimate by a penny.
Quarterly GAAP operating revenues increased 1.6% year over year to $30.71 billion, largely due to higher Mobility service and equipment sales, Consumer Wireline and Mexico revenues, partially offset by lower Business Wireline revenues. The top line missed the consensus mark of $30.96 billion. AT&T recorded strong subscriber growth backed by a resilient business model and robust cash flow position, driven by a diligent execution of operational plans. AT&T expects to continue investing in key areas of 5G and fiber and adjust its business according to the evolving market scenario to fuel long-term growth.
Rogers Communications Inc (RCI - Free Report) reported third-quarter 2025 adjusted earnings of 99 cents per share, which beat the Zacks Consensus Estimate by 7.61% but decreased 3.5% year over year. Revenues of $3.88 billion beat the consensus mark by 1.16% and increased 4.3% year over year.
In domestic currency (Canadian dollar), adjusted earnings declined 3.5% year over year to C$1.37 per share. Total revenues increased 4.3% year over year to C$5.35 billion, primarily driven by growth in the Media businesses. As of Sept. 30, 2025, Rogers Communications had C$6.4 billion of available liquidity, including C$1.5 billion in cash and cash equivalents and C$4.9 billion available under bank and other credit facilities.
T-Mobile US, Inc. (TMUS - Free Report) , a leading wireless service provider, reported impressive third-quarter 2025 results, with both top and bottom lines beating the respective Zacks Consensus Estimate. This Bellevue, WA-based wireless service provider reported a top-line expansion backed by industry-leading postpaid customer growth. T-Mobile follows a multi-layer approach to 5G, with dedicated standalone 5G deployed nationwide across 600 MHz, 1.9 GHz and 2.5 GHz bands.
Net sales were $21.95 billion, up from $20.16 billion in the year-ago quarter, driven by solid growth in service revenues. The top line beat the consensus estimate of $21.78 billion. Adjusted EPS was $2.59 per share, which beat the Zacks Consensus Estimate of $2.42.