![]() Whenever there is a secular decline in an industry (landlines in this case), it is very hard to reverse things on a dime. While those revenues numbers are really tepid for the general population of companies, investors will be delighted if LUMN can come anywhere in the ballpark of $11.7 billion in 2027. LUMN does expect revenue trends and EBITDA trends to reverse starting in 2025. Ok, perhaps that slide was intended to show the great total cumulative progress to be achieved. Even in their investor day presentation, LUMN forecasted 4% growth vs. Revenues are expected to drop another 4%, and we guarantee that no analyst has built a recession into their model. The bad news is that investors are unlikely to see any relief on these chronically declining metrics even in 2024. The good news was that the company did not lower its outlook any further outside the greater forecast for cash taxes. The drop in revenues meant that adjusted EBITDA got crushed by 36% year-over-year and the adjusted EBITDA margin dropped to 33%. Telecommunication companies have substantial leverage on the way up and on the way down. This is a better measure as it is devoid of asset sales. Investors also got to see that all categories were broadly down even compared to Q4 2022. Revenues were down 20% year-over-year, with all categories declining by double digits in percentage terms vs Q1-2022. The company was able to post the smallest of revenue beats, but there was not much to cheer from the overall numbers. We look at the Q1-2023 results, the updated guidance, and tell you where we stand. While the stock has lagged the broader markets, it is rapidly making up lost ground and rallying strongly off the lows. Source: We Need A 180 Degree Course Reversal. Despite the long standing suffering here, we unfortunately don't have much good news for the shareholders. ![]() We hope that the optimistic projections from bulls on net asset value were remotely in the ballpark and that creates the best hope of salvaging something for equity holders. The only hope here for survival is a liquidation, which is the exact opposite of what the new CEO was brought in to do. While the stock was beaten down, material challenges remained ahead. ![]() ( NYSE: LUMN), we did not think that there was any reason to expect an upside in the share price. On our last coverage of Lumen Technologies Inc.
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