Lumen Technologies shares fell 4% after the telecommunications company reported second-quarter revenue that missed analyst expectations, despite posting a narrower-than-expected loss.

The company reported second-quarter revenue of $3.09 billion, slightly below the consensus estimate of $3.11 billion and down 5% compared to $3.27 billion in the same quarter last year. However, Lumen posted an adjusted loss of $0.03 per share, significantly better than analysts’ expectations of a $0.25 per share loss.

Lumen’s quarterly results were impacted by approximately $46 million in one-time revenue givebacks associated with the FCC’s Rural Digital Opportunity Fund. The company’s stock declined following the revenue miss, though management highlighted progress in its transformation strategy.

"Our second quarter results underscore the momentum of our transformation strategy and the discipline of our execution," said Kate Johnson, President and CEO of Lumen Technologies. "We are delivering on our financial milestones and building a stronger, more modern company."

During the quarter, Lumen announced an agreement to sell its consumer fiber business to AT&T (NYSE:T) for $5.75 billion, which includes approximately 95% of its Quantum Fiber operations in 11 states. The company also completed a $2 billion bond offering, extending maturities to 2033 and reducing annual interest expense by approximately $50 million.

Lumen generated Adjusted EBITDA of $877 million for the quarter, compared to $1.01 billion in the second quarter of 2024. Free Cash Flow was negative $209 million, excluding special items, compared to negative $156 million in the year-ago period.

The company maintained its full-year 2025 Adjusted EBITDA outlook of $3.2 billion to $3.4 billion but raised its Free Cash Flow guidance to $1.2 billion to $1.4 billion, up from the previous range of $700 million to $900 million.