Level 3 Earnings: Loss Narrows, Revenue SURGES

Level three Communications, Inc.’s (NASDAQ:LVLT) second quarter loss narrowed due mainly to positive revenue growth. Level three Communications, through its operating subsidiaries, is a facilities-based provider of a range of integrated communications services.

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Level three Communications, Inc. Earnings Cheat Sheet

Results: Loss narrowed to $62 million (loss of $1.58 per diluted share) from $181 million (loss of $1.65 per share) in the same quarter a year earlier.

Revenue: Rose 70.2% to $1.59 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Level three Communications, Inc. fell short of the mean analyst estimate of a loss of 27 cents per share. Analysts were expecting revenue of $1.6 billion.

Quoting Management: “We continue to see steady market demand for our services,” said James Crowe, CEO of Level three.

“We saw double digit sequential growth in Core Network Services sales orders in the second quarter, and as a result, we expect stronger sequential performance for the second half of the year. Additionally, we remain on track to realize projected synergies, and integration is proceeding as planned.”

Key Stats:

Revenue has increased for four consecutive quarters. Revenue increased 70.7% to $1.59 billion in the first quarter. The figure rose 65.6% in the fourth quarter of the last fiscal year from the year earlier and climbed 3.8% in the third quarter of the last fiscal year from the year-ago quarter.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the first quarter, it topped the mark by 22 cents, and in the fourth quarter of the last fiscal year, it was ahead by 4 cents.

Looking Forward: Analysts seem more positive about the company’s results for the next quarter than three months ago. The average estimate for the third quarter has moved from a loss of 26 cents a share to a loss of 18 cents over the last ninety days. Down from a loss of $1.10 per share ninety days ago, the average estimate for the fiscal year is now a loss of $1.16.

Competitors to Watch: Global Crossing Ltd., AT&T Inc., Verizon Communications Inc., tw telecom inc., XO Holdings Inc., AboveNet, Inc., PAETEC Holding Corp., Xfone, Inc., Tata Communications Ltd., and Cincinnati Bell Inc.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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