Level 3 Communications
The 10-second takeaway
For the quarter ended March 31 (Q1), Level 3 Communications met expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP loss per share dropped.
Gross margins dropped, operating margins improved, and net margins expanded.
Level 3 Communications chalked up revenue of $1.59 billion. The 10 analysts polled by S&P Capital IQ foresaw revenue of $1.59 billion on the same basis. GAAP reported sales were 71% higher than the prior-year quarter's $929.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.30. The 11 earnings estimates compiled by S&P Capital IQ predicted -$0.42 per share. GAAP EPS were -$0.66 for Q1 against -$1.83 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 58.6%, 140 basis points worse than the prior-year quarter. Operating margin was 7.3%, 770 basis points better than the prior-year quarter. Net margin was -8.7%, 1,340 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.61 billion. On the bottom line, the average EPS estimate is -$0.24.
Next year's average estimate for revenue is $6.51 billion.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,854 members out of 1,986 rating the stock outperform, and 132 members rating it underperform. Among 253 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 226 give Level 3 Communications a green thumbs-up, and 27 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Level 3 Communications is outperform, with an average price target of $30.50.
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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.