Lumen Technologies, Inc. LUMN is scheduled to report its third-quarter 2025 results on Oct. 30, after market close.
The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is pegged at a loss of 31 cents compared with a loss of 13 cents reported in the prior-year quarter. The estimate has been unchanged in the past 60 days. The consensus estimate for total revenues is pinned at $3.04 billion, implying a 5.5% year-over-year decline.
Lumen’s earnings outpaced the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average surprise being 97.5%. LUMN’s shares have gained 26.2% in the past six months compared with a 4.6% rise of the Diversified Communication Services industry.
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Factors at Play Ahead of LUMN’s Q3 Results
Lumen has been gaining from opportunities arising from the proliferation of AI, which is fueling demand for its Private Connectivity Fabric (“PCF”) solutions. At the end of the second quarter, LUMN had $9 billion in PCF deals, up $500 million since the first quarter. The demand is driven by a combination of demand for overpulls on existing conduit and new route construction. Lumen has deployed 1,200 miles of fiber on 16 routes, as highlighted on the last call. It has also completed IRU conduit deployments across 55 additional routes.
Network-as-a-Service (NaaS) adoption has also been scaling, which bodes well for LUMN. Critical KPIs like the number of customers, total active NaaS ports and active services demonstrated strong sequential growth in the last reported quarter. Lumen highlighted that it has surpassed 1,000 customers for its NaaS platform. It also has partnerships with the three largest cloud service providers and caters to more than 1,500 data centers across the country.
Lumen has been working on a connected ecosystem that helps buyers to purchase, provision and manage their network services while also having cloud solutions available in digital marketplaces. The connected ecosystem is likely to have aided in scaling solutions to new clients faster.
Also, performance within Mass Markets remains secondary given the pending divestiture. The company remains highly optimistic regarding the sale of Mass Markets’ fiber-to-the-home business, including Quantum Fiber, across 11 states to AT&T for $5.75 billion in cash. The transaction is expected to close in the first half of 2026, pending regulatory approvals and customary closing conditions. It will use the proceeds to pay down debt.
Lumen Technologies, Inc. Price and EPS Surprise
Lumen Technologies, Inc. price-eps-surprise | Lumen Technologies, Inc. Quote
Lumen is focused on simplifying its capital structure, extending debt maturities and lowering the cost of capital. These steps help reduce interest expenses and improve financial flexibility, which are key to supporting its digital network platform for AI-driven enterprise and public sector needs. It executed a $2 billion refinancing in the second quarter, resulting in annual interest expense savings of nearly $50 million. In September, Lumen announced that its subsidiary, Level 3 Financing, Inc., successfully repriced its $2.4 billion credit facilities at Term SOFR + 3.25%. The repricing lowers borrowing costs by 100 basis points, generating approximately $24 million in annual interest expense savings.
Cost-cutting efforts are expected to have cushioned margin performance in the to-be-reported quarter. For 2025, Lumen now expects $350 million of run-rate cost benefit compared with $250 million targeted earlier. Adjusted EBITDA is predicted to be between $3.2 billion and $3.4 billion, with Lumen expecting to report numbers near the high end of the range.
However, as Lumen shifts toward newer growth products like fiber and cloud-based offerings, the secular headwinds in the legacy business will continue to prove a strain on the top-line expansion, at least in the near term. Within the Wholesale segment, the Harvest portion of the business, comprising voice and private line, will continue to decline as telco partners sell legacy services. Declining VPN and Ethernet sales are other headwinds.
Moreover, LUMN expects Public Sector Harvest revenues to return to more normalized levels in the second half of 2025 after several quarters of elevated levels. The company expects free cash flow to be lumpy quarter-to-quarter as it moves through the big PCF builds.
Higher costs associated with PCF deals, macro volatility and stiff competition in the AI space remain additional concerns.
Recent Key Developments
On Oct 23, 2025, Lumen announced a deepened collaboration with Palantir Technologies Inc. The two industry leaders, both building core infrastructure for the AI era, have entered a multi-year, multi-million-dollar partnership designed to help enterprises across sectors deploy AI faster and more securely in complex, multi-cloud environments.
On Sept. 22, 2025, Lumen announced plans to add 34 million new intercity fiber miles by 2028, for a total of 47 million intercity fiber miles. In 2025 so far, Lumen has deployed more than 2.2 million new intercity fiber miles, more than 2,500 route miles. It is on track to reach 16.6 million total miles by year-end, using next-generation Corning fiber that fits twice the capacity in the existing conduit. Construction is underway at 176 In-Line Amplifier (“ILA”) sites, where new shelters act as powerful signal boosters with up to three times the power density of traditional ILAs, designed for easy updates and future scalability.
What Our Model Predicts for LUMN’s Q3
Our proven model does not conclusively predict an earnings beat for Lumen this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
LUMN has an Earnings ESP of 0.00% and a Zacks Rank #3.
Stocks With the Favorable Combination
Here are three stocks you may want to consider, as our model shows that these have the right elements to post an earnings beat in this reporting cycle.
Western Digital Corporation WDC currently has an Earnings ESP of +1.89% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
WDC is scheduled to report quarterly earnings on Oct. 30. The Zacks Consensus Estimate for WDC’s to-be-reported quarter’s earnings and revenues is pegged at $1.59 per share and $2.72 billion, respectively. Shares of WDC have gained 85.7% in the past year.
Amazon.com, Inc. AMZN has an Earnings ESP of +12.61% and a Zacks Rank #2 at present. AMZN is scheduled to report quarterly figures on Oct. 30. The Zacks Consensus Estimate for AMZN’s to-be-reported quarter’s earnings and revenues is pegged at $1.57 per share and $177.88 billion, respectively. Shares of AMZN have gained 19% in the past year.
Seagate Technology Holdings plc STX has an Earnings ESP of +2.54% and a Zacks Rank #2 at present. It is scheduled to report quarterly figures on Oct. 28. The Zacks Consensus Estimate for STX’s to-be-reported quarter’s earnings and revenues is pegged at $2.36 per share and $2.53 billion, respectively. Shares of STX have gained 131.1% in the past year.
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Lumen Technologies, Inc. (LUMN) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).