Phone company CenturyLink Inc. reported lower third-quarter net income Wednesday as operating expenses related to its April acquisition of larger phone company Qwest overshadowed increased revenue.
In the July-September quarter, CenturyLink earned $140 million, or 23 cents per share. This is 40 percent lower than the $232 million, or 76 cents per share, it earned a year earlier.
Excluding one-time items, the company earned 34 cents per share, matching estimates of analysts polled by FactSet.
Revenue rose to $4.6 billion from $1.75 billion, also in line with what analysts expected. Of this, $2.7 billion came from Qwest and $223 million came from data-center operator Savvis Inc., which CenturyLink bought for $2.5 billion in July.
The company, which is based in Monroe, La., reported a net gain of more than 57,000 broadband subscribers in the quarter to end with 5.5 million. Had CenturyLink owned Qwest a year ago, it would have had 5.3 million broadband customers at that time.
With its $12.2 billion purchase of Qwest, CenturyLink became the country's third-largest phone company by number of lines. It currently has 14.8 million access lines, down from 15.9 million that the two companies had a year earlier.
After excluding special items, operating expenses rose more than three times to $3.9 billion, from $1.2 billion a year earlier. The increase was largely the result of operating the new businesses _ $2.5 billion for Qwest and $222 million for Savvis. The company also cited "significant costs" related to storms and other natural disasters.
Looking at the current quarter, CenturyLink expects adjusted net income of 58 to 62 cents per share on revenue of $4.6 to $4.65 billion.
Analysts expect adjusted earnings of 34 cents per share on $4.6 billion in revenue.
CenturyLink's stock was unchanged in extended trading after the release of results after finishing regular trading up a penny at $34.55.