Monday, April 27, 2009

Level 3 Reports Post Q1 Revenue of $980 million, 150 Job Cuts

Level 3 Communications reported consolidated revenue of $980 million for the first quarter 2009, compared to consolidated revenue of $1.09 billion for the first quarter 2008. Total Communications Revenue for the first quarter 2009 was $962 million, versus $1.07 billion for the first quarter 2008.The net loss for the first quarter 2009 was $132 million, or ($0.08) per share, which compared to a net loss of $190 million, or ($0.12) per share for the first quarter 2008. Net income for the fourth quarter 2008 was $43 million, or $0.03 per basic share and ($0.03) per diluted share.

"Despite the challenging economic climate and the expected pressure on top line growth, we saw improvement in Adjusted EBITDA," said James Crowe, CEO of Level 3. "We believe the fundamental demand for applications like video over the Internet and wireless data remain solid, and we are well positioned to take advantage of future market growth."

"While we remain cautious, we are seeing trends that point to stabilization in our Core Communications Services revenue base. We expect revenue pressure to continue in the second quarter although at a significantly moderating rate. Our funnel of future sales opportunities remains strong and our quoting and proposal activity has increased, particularly in our Business Markets Group. Customers who were delaying purchases are starting to place orders, and our signed order volume has trended upward. Our churn trends also began to show improvement late in the first quarter.

"We continue our focus on cost improvements and expect to reduce headcount by approximately 150 during the second quarter. This will result in a $6 to $7 million severance charge in the second quarter. Our capital expenditures of $78 million in the first quarter are a good indication of the quarterly trend for the year," said Patel.

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