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Telecommunication Company Centurylink Shares Dropped By 12%

Centurylink

Telecommunication is that sector where there are many large companies which are trying to make sure that they are on the right path because of rapid competition. According to latest reports, telecommunication service provider Centurylink’s shares have been dropped by more than 12% after the company released its fourth quarter and full year earnings report on Thursday. Some analysts made a prediction that company will perform well, but it seems like it has missed those predictions by a small margin. According to reports Centurylink managed to earn $5.78 billion of revenue as compared to analysts prediction $5.98 billion.

On the other hand, if we look into the company’s financial reports more carefully, then it managed to give an earning per share of $0.37 as compared to analyst prediction of $0.36. Even though Centurylink missed expected earnings by a small margin its shares dropped by more than 12% because of other factors. One of the shocking thing which every investor received from CenturyLink is when the company declared that they are going to reduce the annual dividend from $2.16 per share to $1 only. Now some experts said they did not anticipate such type of financial moves form telecommunication company and due to which Centurylink’s stocks went down by a considerable percentage.

No company will decide to cut dividend by such a significant margin, but it seems like Centurylink is not one of those companies. If we go into the company’s record, then it has successfully paid its investors dividend which has worth more than 15% of its market cap. Some experts are saying this move will help the company to invest its liquid funds into more reliable technology. Now those investors who own stocks just for the sake of dividends are selling it off and trying to find substitute companies.

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