Level 3 Communications Meets on Revenues, Misses on EPS

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Level 3 Communications (NYS: LVLT) reported earnings on July 25. Here are the numbers you need to know.

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.

Revenue details
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 details
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.

Margin details
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.

Looking ahead
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.

Investor sentiment
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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The article Level 3 Communications Meets on Revenues, Misses on EPS originally appeared on Fool.com.

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 ofMotley 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.

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