Level 3 Communications Swings To Profit; Shares Up 11%

(RTTNews) - Level 3 Communications Inc. (LVLT) Wednesday reported a swing to profit in the first quarter from a loss last year, helped primarily by increase in revenues and lower expenses. Both earnings and revenues for the quarter breezed past Wall Street expectations, sending Level 3 shares up 11 percent on the New York Stock Exchange.

The Broomfield, Colorado-based company reported a first-quarter profit of $112 million or $0.47 per share, compared to a loss of $78 million or $0.36 per share a year ago.

Last year's result included $0.11 in foreign exchange losses in EMEA and Latin America and a $0.10 loss for the devaluation of the Venezuelan Bolivar.

On average, 14 analysts polled by Thomson Reuters expected the company to report profit of $0.28 per share for the quarter. Analysts' estimates typically exclude special items.

First-quarter revenues grew to $1.61 billion from $1.58 billion last year. Analysts expected revenue of $1.59 billion for the quarter.

At its key core network services division, revenues grew 7 percent to $1.46 billion, as North America sales rose 8 percent, Latin American sales increased 12 percent, while EMEA slipped 3 percent.

First-quarter gross margin, or gross profit as a percentage of revenues, improved to 61.8 percent from 60.1 percent last year. Selling, general and administrative costs dropped to $547 million from $599 million a year ago.

Based on its strong first quarter results, the company now expects adjusted EBITDA to grow 14 to 18 percent for the full year 2014, up from its prior outlook of 11 to 14 percent.

LVLT is currently trading at $41.22, up $4.10 or 11.06%, on a volume of 2.8 million shares, above the three-month average volume.