Level 3 Communications
The 10-second takeaway
For the quarter ended June 30 (Q2), Level 3 Communications met expectations on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP loss per share dropped.
Gross margins shrank, operating margins grew, net margins grew.
Level 3 Communications reported revenue of $1.59 billion. The 10 analysts polled by S&P Capital IQ predicted revenue of $1.61 billion on the same basis. GAAP reported sales were 70% higher than the prior-year quarter's $932.0 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 -$0.29. The seven earnings estimates compiled by S&P Capital IQ forecast -$0.17 per share. GAAP EPS were -$0.29 for Q2 versus -$1.59 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 59.1%, 160 basis points worse than the prior-year quarter. Operating margin was 8.4%, 820 basis points better than the prior-year quarter. Net margin was -3.9%, 1,550 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.63 billion. On the bottom line, the average EPS estimate is -$0.09.
Next year's average estimate for revenue is $6.47 billion. The average EPS estimate is -$0.73.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,841 members out of 1,971 rating the stock outperform, and 130 members rating it underperform. Among 237 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 208 give Level 3 Communications a green thumbs-up, and 29 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 $32.01.
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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.