Slow Road to Recovery Predicted for Level 3

By Kimberly Koerth Comments
Print

Expect mixed news when Level 3 Communications releases its fourth quarter 2013 earnings report on Feb. 5.

The company's enterprise business is expected to continue its uptick, Canaccord Genuity said in a report previewing Level 3's fourth-quarter earnings, anticipated on Wednesday. But other factors may make Level 3's road to recovery more difficult than many expected.

"Although we expect the enterprise revenue trends to further improve under the new CEO, we note that stronger than expected [foreign exchange market] headwinds, continued pressure in legacy businesses and slower than expected recovery in overall enterprise markets will likely make its road to recovery rockier than many had expected," noted Canaccord analyst Greg Miller.

In its third quarter earnings statement, Level 3 reported a loss of $21 million – which was 85 percent less than its loss a year earlier. Total revenue in the third quarter was just under $1.57 billion, with significant growth in core network services.

Canaccord maintained its "hold" rating on Level 3 shares, slapping a $30 price target on the company's stock. It was off more than 3.5 percent on Monday, as of 1:51 p.m. ET.

Comments
comments powered by Disqus