https://seekingalpha.com/amp/article/4220548-high-yielding-centurylink-good-income-investment
There is even more potential for cost-savings, though, as CenturyLink believes that cost-savings of $975 million are achievable. It is thus expected that CenturyLink will capture an additional $200 million in annual cost-savings over the foreseeable future, which will increase profits by $200 million as well, all else equal.
I miss USWEST, Qwest was not so good but compared to centurylink it was a Great place to work.
Just moved all sales mgt to FTO from PTO.......w FTO company does not pay for accumulated earned time off. So if RIF’d you do not get paid for earned time off. Company said they do this to be competitive w other companies......but it is really a cost savings and a way to get more work from salaried employees.
member back in the good old days when Qwest ws the company and everyone worked too much overtime and got paid a lot,,,,,,,,,,,,,,,Joe Naccio
Ring the bell. Cuts are coming ... major cuts are coming.
nturyLink pays out roughly $2.3 billion in dividends each year, which means that the company's excess free cash flow (FCF after dividends) will total about $1.8 billion this year. This amount could be used to pay down debt, but the impact would not be overly large. Relative to the $35.7 billion in long-term debt the $1.8 billion in excess free cash flow pale in comparison, CenturyLink could pay back just ~5% of its total debt a year. It would thus take about 20 years for CenturyLink to fully pay back its long-term debt, not factoring in changes in its cash flows or dividend.
We can thus say that the dividend looks safe for the foreseeable future -- the dividend payout ratio is not really high at 56% -- but the debt that the company holds on its balance sheet has massive proportions. In a rising rates environment, the high debt load could become a problem, as it would likely be more costly to refinance CenturyLink's debt once its bonds mature. This would then lead to higher interest expenses, which would be a headwind for net profits and cash flows.