Level 3 Communications Inc yesterday reported sharply increased second quarter losses as the company continued to build out its IP-based network. Net losses were up 29.4% at $44m or $0.13 per share, on revenues up slightly at 2.9% at $106m. Excluding one time gains of $111m from the company’s stake in RCN Corp and $17m from the sale of some assets in the quarter, the company’s net loss totaled $127m in the quarter or $0.37 a share. Analyst estimates expected losses of $0.42, according to First Call Corp. Revenues at the company were up 2.9% at $106m.
The company, which said that its Communications services unit saw revenues up 47% at $53m, said it had stopped including revenues from reciprocal compensation payments in its quarterly figures. The move followed the decision in May from the Massachusetts Department of Public Utilities which ruled that regional Bell operating company Bell Atlantic Corp was not required to pay companies including Level 3 for terminating calls to an ISP. Level 3 says it will not recognize the payments as a revenue source until uncertainties around the issue are resolved. Operating expenses in the quarter increased to $289m from $144m last time, as the company said it added 500 staff and continued to build out its network.
