CenturyLink claims savings, but losses continue

With a newly minted logo and name in place, CenturyLink, formed by the merger of the former independent telcos Embarq and CenturyTel, reports that as a combined company it will be able to save $475 million annually. Upon closing the merger early last month, CenturyTel said it initially would see $400 million in savings. But during the third quarter, CenturyTel and Embarq's financial results showed typical ongoing voice line loss and declining revenues.

Embarq, for one, reported $1.33 billion in revenue, a 7.9 percent decline from its Q2 2008 take of $1.44 billion. Net income also decreased to $83.3 million, down 8.6 percent from the $91.1 million profit it generated in Q2 2008. Service counts were a mixed bag, as Embarq reported it nudged up high-speed Internet subscribers by 12,000 for a total of 1.47 million, but also lost 163,000 voice lines.   

CenturyTel's second-quarter financial results saw similar declines and increases. CenturyTel's second-quarter revenue was $634.5 million, a 3.6 percent decrease from $658.1 million from Q2 2008. Company earnings dropped 25 percent from $92.2 million to $69 million versus Q2 2008. CenturyTel also saw its high-speed Internet customer subscriptions increase from 607,000 to 681,000, while access lines dropped from 2.08 million to 1.93 million.   

But now the fun part of integrating the two company's operations really begins. CenturyLink said in a press release that it will complete the conversion of Embarq's management systems and initial billing systems in the fourth quarter. The challenge for the combined company will be in its ability to integrate effectively the independent operations and avoid the issues that have plagued fellow independent ILEC FairPoint in its acquisition of Verizon's access lines in New England.

For more:
- Kansas City Business Journal has this article

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