(Reuters) – Telecommunications firm Lumen Technologies raised estimates for annual free cash flow on Tuesday, betting on AI-driven demand to drive growth across its connectivity solutions.
Lumen has been seeing a growing need for its high-capacity fiber, which enables secure digital connections for data centers supporting AI ventures.
The company revised its annual free cash flow forecast upward to between $1 billion and $1.2 billion, a significant increase from the previous estimate of $100 million to $300 million.
On Monday, the company said it had signed deals worth $5 billion with cloud and tech customers including Microsoft and is currently in talks with clients to secure additional contracts worth $7 billion.
Lumen’s stock, which had declined about 65% in 2023, has rebounded and is now up 41% this year following a deal signed in January with a group of lenders that extended its debt maturities to at least 2029.
The Monroe, Louisiana-based company reported revenue of $3.27 billion in the second quarter, compared to estimates of $3.25 billion, according to LSEG data.
Excluding items, it posted a loss of 13 cents per share, compared to a profit of 10 cents per share in the same period last year, as interest expenses jumped 27% to $373 million in the second quarter.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Tasim Zahid)
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