Lumen Technologies Issues 2026 Financial Outlook with Q4 Earnings Beat
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 03 2026
0mins
Should l Buy LUMN?
Source: seekingalpha
- Earnings Beat: Lumen Technologies reported a Q4 non-GAAP EPS of $0.23, exceeding expectations by $0.50, indicating strong profitability despite an 8.7% year-over-year revenue decline.
- Stable Revenue: The company achieved Q4 revenue of $3.04 billion, in line with market expectations, demonstrating Lumen's ability to maintain revenue levels in a competitive environment, which boosts investor confidence in its future performance.
- 2026 Financial Outlook: Lumen projects adjusted EBITDA for 2026 to be between $3.1 billion and $3.3 billion, reflecting an optimistic outlook on future profitability, while free cash flow is expected to range from $1.2 billion to $1.4 billion, indicating strong cash generation capabilities.
- Capital Expenditure Plans: The company plans capital expenditures of $3.2 billion to $3.4 billion in 2026, despite facing cash income tax refunds expected between $350 million and $450 million, signaling Lumen's commitment to investing in future growth.
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Analyst Views on LUMN
Wall Street analysts forecast LUMN stock price to rise
6 Analyst Rating
0 Buy
5 Hold
1 Sell
Hold
Current: 8.000
Low
7.00
Averages
8.33
High
11.00
Current: 8.000
Low
7.00
Averages
8.33
High
11.00
About LUMN
Lumen Technologies, Inc. is a networking company, which connects people, data, and applications quickly and securely. The Company is engaged in providing an array of integrated products and services to its domestic and global business customers and its domestic mass market customers. It operates through two segments: Business segment and Mass Markets segment. The Company conducts its operations under four brands: Lumen, which is its flagship brand for serving the enterprise and wholesale markets, including its Private Connectivity Fabric (PCF) network architecture, Lumen Digital products, and its priority services including Edge, Network-as-a-Service and cybersecurity; Quantum Fiber, which provides fiber-based broadband services to residential and small business customers; CenturyLink, which is engaged in providing primarily mass-marketed copper-based communications services, and Black Lotus Labs, which is its cyberthreat research and intelligence arm.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Reaction: Following her statement, Lumen's shares surged nearly 30%, reversing a significant selloff.
See More
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- Fiber Broadband Investment Returns: AT&T's significant investment in fiber broadband, including a $5.8 billion acquisition of Lumen's fiber business, is expected to expand its coverage to over 40 million customer locations by year-end, a 25% increase from 32 million at the end of 2025, enhancing its competitive position in a saturated market.
- User Growth Potential: The anticipated addition of 8 million users will increase AT&T's broadband customer base from 10.6 million to 13.6 million, representing a 30% growth, providing a new revenue source and growth momentum amid a saturated wireless market.
- Earnings Outlook Improvement: The CFO indicated during the earnings call that adjusted EPS is expected to range between $2.25 and $2.35 in 2026, with a projected double-digit CAGR through 2028, instilling confidence in investors, especially in the current market environment.
- Enhanced Dividend Payment Capacity: With a payout ratio slightly above 50%, the upcoming profit improvements will bolster AT&T's ability to maintain dividend payments and may pave the way for the resumption of annual dividend increases that were suspended in 2022.
See More
AT&T's Fiber Business to Drive EPS Growth
- Fiber Expansion: AT&T plans to increase its fiber service coverage from 32 million to 40 million customer locations by the end of 2026, representing a 25% year-over-year growth that will significantly enhance its market share and competitive position.
- Customer Growth Potential: The addition of 8 million new users is expected to boost AT&T's fiber customer base from 10.6 million to 13.6 million, translating to a 30% increase that could generate nearly $3 billion in annual revenue, alleviating pressures from a saturated wireless market.
- Earnings Outlook Improvement: The CFO projects adjusted EPS to range between $2.25 and $2.35 in 2026, with a double-digit CAGR expected over the next three years, indicating growth potential even in a highly competitive market.
- Dividend Payment Capacity Enhancement: With improving profits, AT&T's dividend payout ratio is slightly above 50%, which may allow for the resumption of annual dividend increases that were suspended in 2022, attracting more income-focused investors.
See More
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- Fiber Expansion: AT&T aims to increase its fiber service coverage from 32 million to 40 million customer locations by the end of 2026, representing a 25% year-over-year growth that significantly enhances its competitive position in a saturated market.
- Customer Growth Potential: The addition of 8 million new users is expected to boost broadband customers from 10.6 million to 13.6 million, a 30% increase that will further drive revenue, especially given the saturation in the wireless market.
- Revenue Expectations: With fiber customers averaging $73 per month, this could translate into nearly $3 billion in additional annual revenue, strengthening AT&T's profitability and ability to sustain dividend payments.
- Profitability Outlook: The CFO projects adjusted EPS to be in the range of $2.25 to $2.35 by 2026, with a double-digit CAGR expected over the next three years, indicating growth potential for the company in a highly saturated market.
See More
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- CEO Stock Purchase: CEO Kate Johnson capitalized on the post-earnings sell-off by purchasing 78,685 shares at an average price of $6.35, totaling approximately $500,000, reflecting her confidence in the company's turnaround strategy.
- Financial Outlook: While the fourth-quarter adjusted earnings per share exceeded expectations, revenue only met them, with management projecting full-year free cash flow between $1.2 billion and $1.4 billion, including $300 million to $450 million in non-recurring tax refunds.
- Debt Management: Lumen successfully reduced its debt burden by selling its consumer-focused fiber-to-the-home business for $4.8 billion, bringing its debt-to-EBITDA ratio down to 3.8 times, although overall revenue and profit growth remains a critical focus.
See More
