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April 30, 2009

Level 3 narrows loss in Q1

Revenue fell 10% on year-ago quarter

By CBR Staff Writer

Level 3 Communications has reported a net loss of $132m for the first quarter 2009, compared to a loss of $190m in the year-ago quarter, on revenue down 10% at $980m.

Operating income during the quarter was $12m, compared to operating loss of $52m in the same period last year. Diluted net loss per share was $0.08 compared to diluted net loss per share of $0.12 a year ago. Consolidated adjusted EBITDA increased 18% to $250m.

The company said total communications revenue fell 10% to $962 billion, with core communications services revenue down 5% at $899m and revenue from other communications services down 42% at $63m.

Sunit Patel, CFO at Level 3, said: In the quarter, we saw the effect of near-term revenue pressures, specifically: the general economic environment driving churn in our enterprise business as well as usage declines, known disconnects from key wholesale customers, typical seasonality in our Vyvx broadcast business, and the currency rate effect on our reported European business. We also experienced revenue pressure from churn in our Wholesale and Content businesses. Our European Markets Group continues to perform well with revenues up 23% year over year on a constant currency basis.

Looking ahead, the company expects to grow 2009 consolidated adjusted EBITDA from the $988m reported in 2008. It also plans to cut approximately 150 positions, which will result in a $6m to $7m severance charge during the second quarter.

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