Why CenturyLink's Stock Fell 12.8% in 2019
Shares of Louisiana-based telecom CenturyLink (NYSE: CTL) fell 12.8% in 2019, according to data from S&P Global Market Intelligence. The bulk of the decline occurred in the spring, followed by relative peace and quiet in the summer and fall.
There was nothing terribly wrong with CenturyLink's earnings report in February -- the company met Wall Street's revenue estimates and beat analysts' consensus projections on the bottom line. However, the stock took its first big step down of 2019 the next day, because CenturyLink also slashed its quarterly dividend from $0.54 to $0.25 per share.
Management explained that the reduction wasn't due to any critical need for extra cash, but that it wanted to speed up the rate at which it was paying down its debt, with the goal of bringing CenturyLink's leverage to less than 3.25 times adjusted EBITDA earnings. That argument went over like a lead balloon with investors, triggering a slow slide in CenturyLink's share prices over the next couple of months. The slide was accelerated by a delayed 10-K filing, and didn't stop until management announced that CenturyLink was looking for a buyer for its consumer services business. By the middle of May, the stock had dropped 30.6% year to date.
Source Fool.com
