LUMN Gears Up to Post Q2 Earnings: What's in the Offing?

Lumen Technologies, Inc. (LUMN) is scheduled to report its second-quarter 2025 results on July 31, after market close.

The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is pegged at a loss of 24 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 $3.13 billion, implying a 4.4% year-over-year decline.

LUMN outpaced the Zacks Consensus Estimate for earnings in three of the trailing four quarters, while missing once, with the average earnings surprise being 64.5%. LUMN shares have plunged 10.6% in the past six months, against the 14.5% rise of its Diversified Communication Services industry and the 4.6% of the Zacks S&P 500 composite.

Factors to Impact LUMN’s Q2 Results

Higher revenues from North American Grow Business and Wave’s revenues, amid headwinds in the legacy business, are likely to have boosted Lumen’s performance in the second quarter. Increasing demand for Lumen's PCF solutions, driven by rapid AI proliferation, is an encouraging sign. Lumen is making significant progress in modernizing and simplifying its operations. It is deploying new digital tools, unifying its networks and leveraging AI for smarter automation.

Investments in PCF are expected to have created lucrative revenue streams and strengthened its position as a relevant infrastructure player. Lumen is moving ahead smoothly with its $8.5 billion PCF projects launched in 2024. Production is underway at 57 ILA sites, with the first 24 set to be completed in the second quarter as planned and within budget.

During the quarter, Lumen focused on simplifying its capital structure, extending debt maturities and lowering its 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. The company finalized a deal to sell its Mass Markets fiber-to-the-home business, including Quantum Fiber, across 11 states to AT&T for $5.75 billion in cash, subject to working capital and other purchase price adjustments. This transaction marks an important step in LUMN’s ongoing transformation into a leading digital enterprise networking company.

It expects to see strong growth in the Quantum business moving forward, as it plans to launch the Quantum Fiber quote-to-cash network architecture to customers in late 2025. Moreover, it is making steady progress on its turnaround, aiming to save $1 billion by 2027 by streamlining its network, IT and product lineup. It plans to merge four network types into a single, simplified system and cut its products from thousands to about 300. By using AI for smarter, automated operations, Lumen expects to see more than $250 million in cost savings this year alone.

Lumen Technologies, Inc. Price and EPS Surprise

Lumen Technologies, Inc. price-eps-surprise | Lumen Technologies, Inc. Quote

Lumen continues to focus on cloud-enabling telecom and expanding adoption of its network-as-a-service (NaaS) solutions. Its strong network, along with integrated hosting and cloud services, sets it apart and supports growth in the cloud market.

However, ongoing revenue pressure from legacy services is likely to have weighed on its performance. Heavy debt load remains a financial risk, especially if earnings remain negative and cash flow is tight. Investing in AI and cloudifying telecom is a smart move for Lumen, but cut-throat competition might have limited its top-line gains.

Key Recent Developments

In June 2025, Lumen was selected to provide the terrestrial backhaul connectivity for the JUNO Trans-Pacific Cable System. The JUNO cable, operated by Seren Juno Network Co., Ltd., is poised to become the highest-capacity cable system connecting Japan and the United States, delivering transformative benefits for businesses and cloud providers on both sides of the Pacific.

In May, Lumen and IBM collaborated to create AI solutions at the edge. The initiative combines IBM's watsonx AI tools with Lumen's Edge Cloud and network. This will help businesses run AI closer to where data is created, reducing cost, delay and security issues. It will make it easier to use AI and improve customer experiences.

In April, Lumen launched its DefenderSM Plus, a network-based cybersecurity solution that uses Black Lotus Labs' threat intelligence to automatically block cyber threats, like bots, malware, phishing and C2 activity, at the network edge before they reach enterprise environments.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for LUMN this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

Lumen presently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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.

Emerson Electric Co. (EMR), expected to release earnings on Aug. 6, currently has an Earnings ESP of +0.46% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here

The consensus estimate for Emerson Electric’s earnings for the third quarter of fiscal 2025 is pegged at $1.51 per share, indicating year-over-year growth of 5.6%. EMR has a trailing four-quarter average surprise of 3.4%.

Illinois Tool Works Inc. (ITW), slated to release second-quarter 2025 results on July 30, has an Earnings ESP of +1.19% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for Illinois Tool Works’ second-quarter 2025 earnings is pegged at $2.56 per share, suggesting a year-over-year rise of 0.8%. ITW has a trailing four-quarter average surprise of 3%.

QUALCOMM Incorporated (QCOM) has an Earnings ESP of +0.60% and a Zacks Rank #3. It is scheduled to report quarterly figures on July 30. The Zacks Consensus Estimate for QCOM’s to-be-reported quarter’s earnings and revenues is pegged at $2.68 per share and $10.36 billion, respectively. QCOM has a trailing four-quarter average surprise of 6.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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