Level 3 Communications
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Level 3 Communications missed estimates on revenue and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP loss per share increased.
Gross margins shrank, operating margins improved, and net margins shrank.
Level 3 Communications reported revenue of $1.58 billion. The 10 analysts polled by S&P Capital IQ expected a top line of $1.64 billion. GAAP sales were 71% higher than the prior-year quarter's $921.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at -$1.02. The 12 earnings estimates compiled by S&P Capital IQ predicted -$1.02 per share on the same basis. GAAP EPS were -$0.80 for Q4 versus -$0.47 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 58.2%, 220 basis points worse than the prior-year quarter. Operating margin was 2.8%, 380 basis points better than the prior-year quarter. Net margin was -10.3%, 470 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.64 billion. On the bottom line, the average EPS estimate is -$0.96.
Next year's average estimate for revenue is $6.70 billion. The average EPS estimate is -$3.26.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,858 members out of 1,985 rating the stock outperform, and 127 members rating it underperform. Among 259 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 235 give Level 3 Communications a green thumbs-up, and 24 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Level 3 Communications is hold, with an average price target of $30.43.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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. The Motley Fool has a disclosure policy.