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.
New mobile devices and services are changing the game and potential profitability in the telecom industry. Some will fail, some will tread water, and those providing the right services and the right devices will shine. Where does Level 3 Communications fit in? Who will lead going forward? Check out "3 Hidden Winners of the iPhone, iPad, and Android Revolution." Click here for instant access to this free report.
- Add Level 3 Communications to My Watchlist.
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.
More from The Motley Fool
Why CenturyLink Shareholders Have Nothing to Worry About (for Now)
A delay in the CenturyLink-Level 3 merger is giving investors the jitters.
Activist Investor Increases His Bet on This High-Yield Stock
Keith Meister increased his stake in CenturyLink as its merger with Level 3 remains pending.
3 Dividend Stocks I'd Never Buy
These three high-yield dividend payers have many things in common, but it's all bad news.