Level 3 Profit, Core Network Services Revenue Rise

Level 3 Communications Thursday reported $124 million in profit for the first quarter of 2016 compared to $122 million for the same quarter in 2015.

Overall revenue barely missed analysts’ expectations at $2.05 billion, down 0.1 percent from the year-ago quarter. The company also said it will record a debt-refinancing related charge of $40 million for the current quarter.

“Level 3’s first-quarter results demonstrate the benefit of our emphasis on profitable growth, as evident in our expanding margins and strong free cash flow during the quarter,” said Jeff Storey, Level 3’s president and CEO. “The continued evolution of our products and service capabilities matches the changing and complex needs of enterprises, positioning the company to become the premier provider of global communications services.”{ad}

Level 3's Jeff StoreyEarlier this month, Storey returned to work after heart surgery sidelined him for two months.

Core network services revenue in the first quarter totaled $1.6 billion in North America and $1.94 billion globally, compared to $1.53 billion and $1.9 billion for the year ago quarter.

Enterprise core network services revenue increased by 5.7 percent year over year. North America enterprise core network services revenue increased by about 2 percent sequentially.

“With our continued focus on profitable revenue growth and strong adjusted EBITDA results in the first quarter 2016, we are increasing our outlook for full year 2016 adjusted EBITDA growth,” said Sunit Patel, Level 3’s executive vice president and chief financial officer. “We now expect full year 2016 Adjusted EBITDA growth of 10 to 12 percent, compared to our previous outlook of 9 to 12 percent. In addition, we continue to expect to generate free cash flow of $1 to $1.1 billion.”

In December, Patel said ongoing demand for cloud services and customers’ desire for higher bandwidth services will fuel growth of Level 3’s business services unit, particularly in North America.

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