Latest news with #LUMN
Yahoo
22-05-2025
- Business
- Yahoo
AT&T CEO talks Lumen deal, competition, tariffs
AT&T (T) is buying Lumen's (LUMN) mass markets fiber assets for $5.75 billion in a deal that is expected to close in the first half of 2026. AT&T CEO John Stankey spoke with Yahoo Finance Executive Editor Brian Sozzi about the acquisition and what lies ahead for the telecom giant. Watch what Lumen's CEO said about the deal. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Yahoo! Finance paying close attention to shares of AT&T. The company purchasing all of Lumen's mass market fiber business for 5.7 million, 5.75 billion dollars, I should say, will help the company offer more fiber uh options across the United States. Let's bring in uh AT&T Chairman and CEO John Stankey. John, always nice to get some time with you. So, $5.75 billion for uh a brand or or an asset that has a million customers, that's a big price. Why did you feel you had to pay that amount? Hi Brian, it's good to be back with you and I I think it's just a continuation of what you and I have been talking about, which is a company we believe very strongly that ultimately consumers want to buy their internet service from one place, whether they're on the go and using a mobile phone or at home, entertaining themselves or doing important business. And what we're picking up is a little over 4 million past households. Um, you're correct, there's only a million customers, but that's part of the attractiveness of this. We believe we can actually penetrate that base quite a bit more effectively, especially when we invest more heavily to grow the footprint and get the scale that's necessary to compete in fiber. So when you think about where we stand today, by the time we reach 2030, we'll have doubled our fiber footprint from about 30 million passings to 60 million. And we'll pick up probably a little over 10 million from this particular footprint that we're picking up from Lumen as we develop and build it out. So we're really excited about that opportunity, not only because of broadband, but these happen to be in markets where we're a bit under positioned in share in our wireless business. So to the extent that we can do better on fiber broadband, we think in Seattle and Phoenix, in Denver, we can actually lift our share of wireless as a result of this, and that's kind of a two for if we uh, we pull that off the right way. Is that the, I guess, the not so secret play here, John, that you sell, and you've called it converge in the past, but let's say bundles, where if you're a fiber customer, now you're going to belong to ATT wireless and ultimately, you will pay a higher price for all this stuff. Well, you're buying two services and you're certainly getting better uh better functionality as a result of putting them together. And yeah, you're going to end up paying for each of the services, but you're going to be getting a value that's better than if you were out splitting them between two other companies. And as the forward uh momentum of our product development increases, you're going to get other features and benefits of having the two together. So for example, in the unusual that your fiber goes out, the gateway will automatically back up to your wireless service. So until we can get out there to repair it, you'll have that kind of backup capability. And those types of things are really important to our customers who expect high value services. Why is the competition so fierce right now for these fiber assets? I see what Verizon just acquired officially a couple weeks ago with uh Frontier. You have T-Mobile tying up in a joint venture with Lumo. Take me inside the state of play of the state of play in the industry of it. Well, because fiber is the best technology and it's going to be the best technology for the future, and they're all trying to catch us. So they're all flailing around, trying to make sure that they can try to collect some footprint and I think we just made a big move here that's going to not only increase our lead, but extend it further. The cable companies must really hate what you guys are doing. I can't speak to how cable's reacting. I can tell you that customers seem to be voting with their feet. You mentioned that the deal is expected to close in the first half of 2026. How confident that you can get this deal passed inside of administration that coming into the year, many uh CEOs thought it was going to be a friendly administration to do deals. Not necessarily has that been the case. Yeah, I think there's everything going for this deal when you think about it. First of all, we're investing in great infrastructure that makes the US economy more competitive. We're going into footprints and markets where the previous owner didn't have the wherewithal and capability to do that. So we're going to step up investment of this world class infrastructure that I I think is right on policy for US competitiveness. When we do that and we start building and investing, we hire people that have to trench and work in local communities to get that done. When customers buy the service, we hire people that shows up at somebody's home to actually install it, put it in and service it. And when you think about the dynamic of somebody investing in that infrastructure, it creates a more competitive market, which ultimately is great for the consumer as well. So it's really hard to see where a company like ours that has a bunch of good, solid, middle class, union represented jobs working in these communities isn't going to look at, somebody's going to look at this and say, we not only want this, we want this fast. No, makes a lot of sense, John, but you know, going back to what Verizon and T-Mobile have gone through to get their deals passed. Verizon had to roll back certain DEI initiatives to get a sign off from FCC chair Brandon Carr. Same deal with T-Mobile. Are you prepared to make that same call that if the administration says, John, we want to see you roll back DEI, uh if you want to get this deal done, we're going to do it. We we don't have to roll back anything, Brian. Our policies and our approach around AT&T have always been that we progress people on merit. Any employee that comes to work here should have an opportunity to grow their career, work on building their skills, have an opportunity to succeed and earn a living, and we want to help them do that. We want to help all of our employees do that. That's always been our policy and it will be our policy going forward. And our goal is to make sure that every employee that walks through the door of AT&T feels like they belong here and it's a good place for them to work, and I'm pretty confident that anybody who examines our practices and how we run the business is going to come to that same conclusion. So it sounds like you you may take a a different approach than your competitors and trying to get this deal closed? Well, I don't want to prognosticate on the future when I have no idea what's going to occur, but as I said, there's an awful lot of good things with this deal where it makes perfect sense. And I feel like we run the business in a really responsible manner. We're right in line with the kind of things that this administration would like to see moving forward. So I can't wait to tell the story, to be honest with you. John, before I let you go, I recently talked to um, one of your, the CEO of one of your biggest competitors, T-Mobile, and it was on the topic of tariffs. Now he told me his company will not eat tariffs. These prices, if smartphones go up, he will pass them on to consumers. Is that the same vibe over at AT&T? Well, first of all, I don't know what's going to happen to smartphone pricing yet, as you know, we're we're sitting in the middle of kind of a transitionary period where the administration is trying to decide on what its final position is. And ultimately, it is the device manufacturer like an Apple or a Samsung that will set the price that they'll they'll turn back to us. So not knowing that they've changed anything, if they should increase the prices because of tariff driven costs, um like in the past, I would expect that probably that flows through to the consumer. Now, handset prices have been going up with or without tariffs over the last decade, and we've done a lot of things and how we've brought those products to market to try to help the consumer get through the fact that that device is getting a little bit more expensive. Sometimes we extend the amount of time that the individual pays for it or we do different things on return pricing to help offset uh the actual first cost purchase. We'll continue to work with consumers to find a way to try to make sure that they've got a good solid device to be able to use our network and carry forward, but I do ultimately expect if the device gets more expensive that the consumer will probably over time have to bear that price, or they'll make some decisions such as hanging on to a device a little bit longer. I know, John, you and I have talked in the past. You are an avid economic data watcher. It's just what you do. Um, to that end, have you seen any signs of stress in your customer base as these tariffs start to hit the economy? Of course, we saw first quarter GDP decline, consumers sentiment has now started to weaken for five straight months. Any signs of concern in your business? You know, unfortunately, or fortunately, I guess, maybe, at AT&T, we're really not a leading indicator. I think that um, you tend to find other parts of the retail segment that maybe have better indicators if you're at the early stages of an economic decline. Our products and services are so central to people's everyday lives, it tends to be something they hold on to for a very long period of time before they start making any decision of either not spending or spending down. I've not seen that in our business, Brian. Our business still is very strong, customers continue to buy the services, and they continue to pay us for them, and we feel really good about where we stand right now. Uh good luck on getting this deal uh across the finish line. Again, AT&T looking to purchase all of Lumen's mass market fiber business for 5.75 billion dollars. AT&T Chairman CEO John Stankey, always good to see you. Good to be with you, Brian. Thanks for your time.
Yahoo
22-05-2025
- Business
- Yahoo
Lumen CEO talks AT&T deal, enterprise: We have 'right to win' in AI
Lumen Technologies (LUMN) agrees to sell its consumer fiber-optic internet business to telecommunication giant AT&T (T) in a $5.75 billion cash deal. Lumen CEO Kate Johnson joins Julie Hyman and Brad Smith on Catalysts to talk more about the deal and how it's allowing Lumen to focus more on its enterprise business, particularly in its ability to scale and AI. To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
Yahoo
20-05-2025
- Business
- Yahoo
Lumen Surges 30% in a Month: Where Will the Stock Head From Here?
Lumen Technologies, Inc.'s LUMN shares have surged 29.6% in the past month, outpacing the S&P 500 composite and Diversified Communications Services sector's growth of 15.4% and 6.3%, respectively. Lumen also outperformed some of its peers, such as Verizon Communications VZ, AT&T T, and T-Mobile US, Inc. TMUS. Verizon and AT&T have registered gains of 3.2% and 6.4% respectively, while T-Mobile has lost 3.7% over the same time frame. Image Source: Zacks Investment Research Closing at $3.98 as of yesterday's trading session, LUMN stock is currently trading way below its 52-week high of $10.33. With a significant pullback, investors are likely to contemplate the stock's growth trajectory. Will the company's efforts to capitalize on the fiber opportunity bear fruit and propel the stock upwards? Should investors stay invested or make an exit? Let us analyze the stock in detail to ascertain if it is worth investment consideration. Increasing demand for Lumen's Private Connectivity Fabric ('PCF') solutions amid rapid AI proliferation is emerging as an encouraging development. Lumen has secured a total of $8.5 billion in PCF deals in 2024. As AI needs surge, large companies across various industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce. Lumen has inked deals with various tech giants like Microsoft, Amazon, Google Cloud and Meta Platforms to provide the network capabilities for AI innovation. On the last earnings call, Lumen added that it continues to see overall PCF demand for both large deal CST levels and at the smaller enterprise deal level. Increasing demand for Lumen services, particularly for Waves and IP in its large enterprise and mid-market segments, remains a highlight. Investments in PCF are expected to create revenue streams and strengthen Lumen's position as a relevant infrastructure player going ahead. The company also remains focused on 'cloudifying' telecom and driving the adoption of its network-as-a-service (NaaS) solutions. Lumen's strong network capabilities, integrated hosting and network solutions are likely to promote growth in the cloud business. Its managed and cloud services are key differentiators from other players in the market. Lumen highlighted that it has more than 500 customers currently using NaaS services in 2024. Some of its NaaS solutions with private connections include Lumen Ethernet On-Demand and Lumen IP-VPN (Internet Protocol Virtual Private Network) On-Demand. These solutions are designed to provide users with private cloud connections and augmented data safety and security. Lumen has introduced the Lumen Cloud Communications platform, a next-gen unified communications solution to gain a larger share of a $47 billion and growing cloud voice total addressable market. Lumen Technologies, Inc. price-consensus-eps-surprise-chart | Lumen Technologies, Inc. Quote Lumen continues to progress with its turnaround and is striving to boost operational efficiency. The company is anticipating $1 billion in cost savings by the end of 2027 through planned infrastructure simplification across the network, product portfolio and IT. It is looking to integrate the network across all four different architectures by engineering them into one simplified, standardized network fabric. This integration will also aid in product portfolio simplification. It has also been leveraging AI tech to drive intelligence and automation. Management expects to significantly reduce the product count from thousands of product codes to a target of nearly 300. In the current year, it expects more than 250 million of run-rate cost benefit. From a valuation perspective, LUMN is trading at a massive discount. Going by its trailing 12-month price-to-sales ratio, LUMN is trading at a multiple of 0.3, much below the Technology Services industry's ratio of 1.47. Image Source: Zacks Investment Research In comparison, Verizon, AT&T and T-Mobile are trading at multiples of 1.38, 1.65 and 3.38 of compared with the Wireless National Industry's multiple of 2.35. Lumen continues to witness weakness in the legacy business. In the first quarter of 2025, Lumen's total revenues declined 3.3% year over year to $3,182 million. As Lumen shifts toward newer growth products like fiber and cloud-based offerings, the secular headwinds in the legacy business will continue to prove a strain on the top-line expansion at least in the near term. For 2025, Lumen continues to expect adjusted EBITDA in the band of $3.2-$3.4 billion and capital expenditures to be between $4.1 billion and $4.3 billion. EBITDA in 2025 is expected to be below the levels of 2024, owing to the investments in transformation, along with higher startup costs for PCF sales and legacy revenue declines. Lumen expects EBITDA to significantly rebound in 2026 and be more than $3.5 billion. It also anticipates that the metric will register growth thereafter. Free cash flow is expected to be between $700 million and $900 million. Management added that free cash flow would be lumpy from quarter to quarter as it moves through the PCF builds. Lumen has a very debt-heavy balance sheet. As of March 31, 2024, the company had $1.9 billion in cash and cash equivalents with $17.334 billion of long-term debt compared with the respective figures of $1.889 billion and $17.494 billion as of Dec. 31, 2024. Moreover, focus on AI and cloudifying telecom is a positive, but these markets are rife with heavy competition, which could be a serious impediment to the top-line expansion for Lumen. Analysts remain bearish as reflected in the downward estimate revision for the current year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Image Source: Zacks Investment Research Lumen is navigating a transformative period, aligning itself with the massive growth of AI, cloud computing and digital-telecom services. Increasing PCF demand and deals with tech giants are creating a strong foundation for growth. Expansion into NaaS markets is an additional tailwind. Extensive cost cuts and discounted valuation make LUMN a compelling investment opportunity. However, near-term pressure from legacy business decline, heavy debt load and competitive risks remains concerning. While long-term prospects are promising, execution risks persist. Given the mixed picture, it might not be a prudent investment decision to bet on the stock at the moment, which carries a Zacks Rank #3 (Hold). For long term investors, staying invested seems prudent as long term prospects remain intact. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T) : Free Stock Analysis Report Verizon Communications Inc. (VZ) : Free Stock Analysis Report T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report Lumen Technologies, Inc. (LUMN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
LUMN Q1 Earnings Call: Digital Transformation and Fiber Initiatives Drive Revenue Outperformance
Telecommunications infrastructure company Lumen Technologies (NYSE:LUMN) reported Q1 CY2025 results topping the market's revenue expectations , but sales fell by 3.3% year on year to $3.18 billion. Its non-GAAP loss of $0.13 per share was 51.1% above analysts' consensus estimates. Is now the time to buy LUMN? Find out in our full research report (it's free). Revenue: $3.18 billion vs analyst estimates of $3.12 billion (3.3% year-on-year decline, 1.9% beat) Adjusted EPS: -$0.13 vs analyst estimates of -$0.27 (51.1% beat) Adjusted EBITDA: $929 million vs analyst estimates of $816.2 million (29.2% margin, 13.8% beat) EBITDA guidance for the full year is $3.3 billion at the midpoint, below analyst estimates of $3.33 billion Operating Margin: 3.4%, up from 1.4% in the same quarter last year Free Cash Flow Margin: 11.1%, down from 15.7% in the same quarter last year Market Capitalization: $4.42 billion Lumen's first quarter results reflected ongoing operational changes and strategic investments in digital platforms and fiber infrastructure. Management pointed to expansion in the company's core Grow product categories—led by demand for fiber and next-generation network services—as a key factor in surpassing market revenue expectations. CEO Kate Johnson highlighted progress in modernizing networks, expanding direct fiber connections, and introducing new digital offerings. She stated, 'We're confident in our goal of generating at least $250 million in savings exiting 2025 and $1 billion exiting 2027.' Looking forward, Lumen's guidance is shaped by both macroeconomic uncertainty and the company's transition to a digital-first model. Management reiterated its commitment to margin expansion and long-term revenue growth through new digital services and operational efficiency. CFO Chris Stansbury noted, 'We have confidence in our margin expansion and total EBITDA returning to full year growth in 2026 and growing thereafter,' citing ongoing cost optimization and platform adoption as critical drivers for the rest of the year. Lumen's management detailed several transformation initiatives in Q1, emphasizing digital platform adoption and network modernization as primary contributors to performance. The company's results benefited from lower disconnect rates, strong fiber broadband growth, and continued improvement in enterprise and public sector demand. Digital platform adoption: Lumen recorded a 23% quarter-over-quarter increase in new digital customers, with a 26% rise in Fabric Ports provisioned and a 29% jump in layered digital services sold. Management attributed this to the appeal of on-demand, cloud-style networking. Fiber infrastructure expansion: The company reported progress on its $8.5 billion private connectivity fabric (PCF) projects, with 57 sites under construction and the first tranche on schedule. This buildout is intended to support AI-driven network demand. Enterprise and public sector momentum: Grow product revenue—especially from large enterprise and public sector clients—posted near double-digit growth. Public sector revenue grew 14.7% year over year, driven by large bookings and modernization initiatives. Legacy service decline management: Lumen continued to proactively disconnect uneconomical legacy services, which contributed to lower absolute dollar disconnects and improved overall margins. Management views these actions as margin-accretive. Network modernization savings: The company reiterated its target for $250 million in cost savings exiting 2025, driven by unified network architecture, automation, and AI integration across operations. Management's outlook for the year centers on continued adoption of digital networking, fiber expansion to support AI and cloud workloads, and disciplined cost reductions. The broader trend is a transition from legacy telecom to a digital, software-centric model that could enable margin improvement and new revenue streams. Digital service scaling: Lumen expects further uptake of its digital platform and Fabric Ports, which allow customers to manage multiple services more efficiently and could drive higher-margin revenue over time. AI and enterprise demand: The company is positioning its network to support growing enterprise needs for bandwidth, particularly as AI applications accelerate data traffic and require reliable, low-latency connectivity. Operational efficiency initiatives: Management is focused on achieving targeted cost savings through ongoing network unification, automation, and simplification, which are intended to offset declines in legacy products and support margin expansion. Michael Rollins (Citi): Asked if Grow revenue can sustain double-digit growth and how much is from new versus existing customers. Management said demand is strong, driven by large enterprise and public sector, but did not specify the customer mix. Batya Levi (UBS): Inquired about the impact of cloud economics on margins and the transferability of these strategies to other segments. Management explained that digital platforms lower marginal costs but said it is too early to quantify margin impact. Jim Schneider (Goldman Sachs): Sought details on the timing of the remaining PCF pipeline conversion and potential risks from accelerated legacy disconnects. Management confirmed active customer discussions and expects continued strategic investment in fiber. Nick Del Deo (MoffettNathanson): Asked if public sector revenue benefited from large, lumpy payments and how new digital services are priced. Management said public sector remains strong and digital services are priced based on value, not discounts. Frank Louthan (Raymond James): Requested differentiation details for the NAS product and color on public sector trends. Management highlighted the unique integration of digital and physical networks and emphasized ongoing strength in public sector bookings. In the coming quarters, the StockStory team will watch (1) the scale and pace of adoption for Lumen's digital platform and Fabric Ports, (2) the completion and revenue contribution from ongoing PCF fiber expansion projects, and (3) the company's progress toward its cost savings targets through network modernization and automation. Developments in cloud partnerships and enterprise demand for AI-ready infrastructure will also be key factors. Lumen currently trades at a forward EV-to-EBITDA ratio of 1.2×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
06-05-2025
- Business
- Yahoo
Why Lumen Technologies, Inc. (LUMN) Soared on Monday
We recently published a list of Why These 10 Firms Soared on Monday. In this article, we are going to take a look at where Lumen Technologies, Inc. (NYSE:LUMN) stands against other Monday's best performers. The stock market kicked off the trading week on a negative note as investors sold off on a new round of uncertainties from President Donald Trump's tariff policies. The Nasdaq fell by 0.74 percent, while the S&P 500 dropped 0.64 percent and the Dow Jones was down by 0.24 percent. Over the weekend, Trump told reporters that the US was negotiating with many countries, 'but at the end of this, I'll set my own deals — because I set the deal, they don't set the deal.' He added that he had no intentions to talk with Chinese President Xi Jinping, dampening hopes of a potential negotiation between the two of the world's largest economies. Beyond the major indices, 10 companies stood out with strong gains amid a flurry of fresh developments. In this article, we name Monday's 10 best performers and detail the reasons behind their gains. To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume. Why Lumen Technologies, Inc. (LUMN) Soared on Monday Close-up of a technician's hands adjusting a communication router. Lumen Technologies, Inc. (NYSE:LUMN) Lumen Technologies jumped by 11.9 percent on Monday to finish at $4.23 apiece as investors cheered the company's bullish outlook and business recalibration, saying that it would now focus on growing and offering network services and officially dropping home internet, which does not sit well with its goals. During the company's shareholders meeting, Lumen Technologies, Inc. (NYSE:LUMN) CEO Kate Johnson said that its network-as-a-service (NaaS) platform is gaining traction and disrupting the market. 'And when I say higher, like it's an incredible rate,' Johnson was quoted as saying. 'I don't want to give it right now, but over the past 90 days, very, very significant growth. And what that suggests is that there's a faster path to revenue for the cloud companies, partnering with Lumen to provide networking for their end customers.' In the first quarter of the year, Lumen Technologies, Inc. (NYSE:LUMN) swung to a net loss of $201 million from a $57 million net income in the same period last year. Revenues dipped by 3.3 percent to $3.18 billion from $3.29 billion year-on-year. Overall, LUMN ranks 3rd on our list of Monday's best performers. While we acknowledge the potential of LUMN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LUMN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
