Level 3 Communications Inc. Earnings Cheat Sheet: Margins Expand For Fifth Straight Quarter

Level three Communications, Inc. (NASDAQ:LVLT) reported its results for the third quarter. 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 Earnings Cheat Sheet for the Third Quarter

Results: Reported loss of $207 million ($1.75 per diluted share on adjusted basis from stock split) from $163 million (loss of $1.47 per share on a split-adjusted basis) in the same quarter a year earlier.

Revenue: Rose 1.6% to $927 million from the year earlier quarter.

Actual vs. Wall St. Expectations: The mean estimate for LVLT was a loss of $1.48 per share. It fell short of the average revenue estimate of $1.29 billion.

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.5 percentage points to 61.2% from the year earlier quarter. Over that span, margins have grown on average 1.7 percentage points per quarter on a year-over-year basis.

Revenue has now gone up for three straight quarters. In the second quarter, revenue rose 2.6% to $932 million while the figure rose 2.1% in the first quarter from the year earlier.

Looking Forward: Analysts seem more positive about the company’s results for the next quarter than a month ago. The average estimate for the fourth quarter has moved from a loss of $1.31 a share to a loss of 97 cents over the last thirty days. For the fiscal year, the average estimate has moved from a loss of $6.08 a share to a loss of $5.15 over the last thirty days.

Competitors to Watch: Global Crossing Ltd. (NASDAQ:GLBC), AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), tw telecom inc. (NASDAQ:TWTC), XO Holdings Inc. (XOHO), AboveNet, Inc. (NYSE:ABVT), PAETEC Holding Corp. (NASDAQ:PAET), Xfone, Inc. (AMEX:XFN), Tata Communications Ltd. (NYSE:TCL), and Cincinnati Bell Inc. (NYSE:CBB).

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(Source: Xignite Financials)