The Broomfield-Colo.-based service provider lost $182 million in the three months ending Dec. 31 – that’s compared to a year-earlier profit of $43 million. The number also outpaced 2009’s third-quarter losses of $170 million. Revenue fell, too, by 12 percent to $921 million. On the whole, the losses were higher than analysts expected.
Investors reacted harshly to the news. Level 3’s shares dove 10.14 percent to $1.24 by 12:38 p.m. Eastern. The 52-week low stands at 60 cents.
Business customer cutbacks, prompted by the economic recession, continue to fuel Level 3’s financial troubles. Nonetheless, wholesale large enterprise and government users buying core network services spent enough to give Level 3’s revenue in those units a slight uptick, while their mid-market and Europe-based counterparts tamped down their outlay. CEO James Crowe said Level 3 is remaining cautious about improvements but, he added, “we do see evidence that customers are returning to more historically normal levels of purchases.”
Because of that, Level 3 plans to hire more salespeople and boost its network capex in 2010.
“We believe it is the right time to increase our investment for growth,” said Sunit Patel, executive vice president and CFO, in a prepared statement. As a result, Level 3’s 2010’s operating expenses will surpass 2009’s “slightly,” he said.
It’s not clear what those plans mean for Level 3’s debt load. The company is still carrying $5.76 billion in long-term debt and, while that’s down $86 million from the third quarter, it remains burdensome.
Meanwhile, for all of 2009, Level 3 showed a net loss of $618 million, compared to a net loss of $318 million in 2008. Revenue took a hit as well, dropping from $4.3 billion to $3.76 billion.
.@Adtran updated its Mosaic suite this week. dlvr.it/RBMhzs
August 16 2019 @ 22:30:02 UTC
AT&T helped found the Airship project last year. dlvr.it/RBJjCl
August 15 2019 @ 23:45:32 UTC