Lumen’s Stock Surges As Q3 Revenue Beat Offsets EPS Miss: Retail Mood Brightens

Lumen Technologies ($LUMN) shares were up more than 8% on Wednesday morning, after the company reported strong third-quarter revenue, boosting retail sentiment.

Monroe, La.-based Lumen, which provides networking technology to many large tech companies including Google and Meta, posted Q3 revenues of $3.22 billion, beating analyst estimates of $3.21 billion.

The increase came on the back of “continued operational progress and sales momentum” across its growth portfolio, the company said, noting a “record quarter for net subscription additions in its Quantum Fiber business.

Lumen’s earnings per share (EPS) results were off the mark, however, coming in at a loss of $0.13 a share, worse than $0.9 analysts were expecting.

It posted adjusted earnings before interests, taxes, depreciation and amortization (EBITDA) of $899 million compared to $1.049 billion in the same period last year.

Its free cash flow, excluding special items, jumped to $1.198 billion for the quarter, from $43 million a year earlier.

Sentiment on the stock turned ‘extremely bullish’ from ‘neutral’ a day ago.

Lumen updated its full-year 2024 financial outlook  – its free cash flow range is now pegged at $1.2 -$1.4 billion, compared to $1.0 billion and $1.2 billion reported earlier.

"The largest technology companies in the world are choosing Lumen to help build the backbone for the AI economy. What's more, enterprises are recognizing that every AI strategy needs a network strategy, and they're coming to Lumen for help," said Kate Johnson, president and CEO of Lumen Technologies said in a statement.

"We continue to transform Lumen's business while also leading a once in a generation expansion of the internet."

On Monday, Lumen announced a partnership with Google Cloud to drive AI innovation. Google Cloud will underpin Lumen’s Digital Twin technology, providing proactive insights across the Lumen network.

Last month, the company said it had formed a new partnership with Meta Platforms Inc. ($META), with an aim to significantly expand the social media giant’s network capacity to support its AI ambitions.

Stocktwits users were upbeat on the company’s prospects.

Lumen stock is up 321% year-to-date.

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