The Broomfield, Colo.-based company said on Thursday it lost $238 million, or 14 cents a share, compared to a loss of $132 million, or 8 cents a share, a year earlier. Revenue also fell 7.1 percent to $910 million. Analysts on average expected $908 million in sales.
The biggest slowdowns came in the wholesale, mid-market, wholesale voice and “other communications services” sectors. Level 3, which has built its business on wholesale offerings, saw a 5 percent drop in wholesale sales alone. CFO Sunit Patel said the decrease was anticipated due to “expected seasonality in the Vyvx broadcast business and a decline in intercarrier compensation, partially offset by an asset sale of approximately $7 million.”
Midmarket revenue declined by 8 percent, wholesale voice by 4 percent and “other” by 46 percent.
On the plus side, the large enterprise and federal government divisions fared well, recording a 4 percent revenue gain. Part of that comes thanks to the nearly $13.8 million Level 3 landed in broadband stimulus money. The carrier plans to link rural areas to national fiber-optic networks carrying Internet traffic.
Level 3’s Europe division was the only other to report an increase – its revenue share grew by 1 percent.
CEO James Crowe said Level 3’s sales and churn are improving.
“Ongoing broadband demand is providing sales opportunities across the company,” he said in a prepared statement. “And our continued improvements in customer experience are paying off, contributing to a decline in disconnects.”
Crowe was referring to the back-office debacles that ensued after Level 3 went on a buying spree a few years ago. The wholesaler snapped up so many rivals at once that platform integration grew into a messy affair, spurring many customers to find new providers.