Lumen Technologies reported a $8.74 billion loss in the second quarter, a huge drop over the $344 million in profit it made in the same quarter last year.
Shares in the company - previously known as CenturyLink Enterprise - have fallen more than 66 percent this year, putting the company's market cap at just $1.8bn. Second quarter revenue was $3.66bn.
Lumen recorded a non-cash impairment charge of $8.793bn, which is an accounting entry that reflects a reduction in the value of an asset due to a decrease in its expected future cash flows or fair value. It was triggered by the continued decline in Lumen's share price in the April-June period.
In a financial statement, the company said: "Under GAAP (generally accepted accounting principles), the company is required to perform periodic impairment tests related to its goodwill asset. The sustained decline in our share price during the second quarter was considered a triggering event requiring evaluation of goodwill impairment.
"Based on this analysis, the company recorded a non-cash $8.8 billion goodwill impairment charge in the second quarter of 2023. The goodwill impairment was driven by the difference between the company's market capitalization and the carrying value, primarily in its North America business reporting unit."
The company continues to struggle with a huge debt burden, but said that it was able to bring its debt down from $20.42bn at the end of last year to $19.9bn. It spends more than a billion a year on interest payments.
"Our turnaround is underway, and we're very excited with what lies ahead," CFO Chris Stansbury said in an earnings call that did not address the impairment charge. "We're reducing our estimate for stock-based compensation expenses to approximately $65 million for the full year 2023," he added.
Lumen lost 93,000 copper DSL subscribers in the quarter, and gained 21,000 Quantum Fiber customers.