Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Level 3 Can Recast Itself in a New Image

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

When your old business methods stop working, you can either fix them or find something new to sell. Communications service provider Level 3 Networks (Nasdaq: LVLT  ) has tried and largely failed to breathe new life into its stagnant data pipeline operations, but it's having better luck with some new initiatives.

In the just-reported third quarter, Level 3 saw sales stay roughly flat on a quarter-to-quarter and year-over-year basis at $912 million. The company is investing heavily in expanding its content delivery network (CDN) services, because that's where the growth is. For proof of this, you can look at the sales growth rates and income margins of pure-play CDN providers Akamai Technologies (Nasdaq: AKAM  ) and Limelight Networks (Nasdaq: LLNW  ) , then compare them to more traditional backbone runners like Level 3 or Global Crossing (Nasdaq: GLBC  ) . The CDN guys will come out on top in nearly every growth contest; Limelight is still building up to the critical mass needed to turn a reliable profit, but Akamai crushes regular networking profits on every level.

So it's no wonder that Level 3 wants a little more of that hot action. The company isn't giving up entirely on selling backbone networks and is in fact bragging about how it connects the retail outlets of fast-growing coffeehouse chain Green Mountain Coffee Roasters (Nasdaq: GMCR  ) across the country as an example of doing those services right. Keeping up with that company's growing needs is a nice feather in Level 3's hat.

But the faster Level 3 can become a content delivery powerhouse, the better. Being one of three CDN providers (and you already know the other two) to serve up movie streams for digital movie maven Netflix (Nasdaq: NFLX  ) is a good start, but Level 3 clearly can, wants to, and will do more.

Follow Level 3's turnaround and transformation story by adding the stock to your watchlist.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Akamai Technologies and Green Mountain Coffee Roasters are Motley Fool Rule Breakers choices. Netflix is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1350465, ~/Articles/ArticleHandler.aspx, 10/20/2016 3:46:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,170.88 -31.74 -0.17%
S&P 500 2,140.91 -3.38 -0.16%
NASD 5,241.04 -5.38 -0.10%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/20/2016 3:30 PM
AKAM $56.68 Up +0.06 +0.11%
Akamai Technologie… CAPS Rating: ****
GLBC.DL $0.00 Down +0.00 +0.00%
Global Crossing Lt… CAPS Rating: *
GMCR.DL $0.00 Down +0.00 +0.00%
Keurig Green Mount… CAPS Rating: **
LLNW $1.88 Down -0.01 -0.53%
Limelight Networks CAPS Rating: **
LVLT $47.40 Down -0.23 -0.48%
Level 3 Communicat… CAPS Rating: ***
NFLX $122.95 Up +1.08 +0.89%
Netflix CAPS Rating: ***