Why Level 3 Communications Got Crushed
Jul 25th 2012 3:42PM
Updated Jul 25th 2012 3:46PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Level 3 Communications (NAS: LVLT) got crushed today by as much as 15% after the company reported earnings.
So what: Revenue in the second quarter added up to $1.6 billion, which resulted in a net loss of $62 million, or $0.29 per share, worse than expected. The shortfall was primarily attributed to weakness in Europe, where revenue from the U.K. government fell, although this was somewhat expected.
Now what: Sales to the U.K. government fell 13% sequentially to $42 million. Core network services, or CNS, sales in North America and Latin America grew by 1.1% and 2.3%, respectively. CNS revenue growth is expected to accelerate during the second half of the year. Level 3 reiterated its prior guidance, expecting adjusted EBITDA to increase by 20% to 25% for the full year.
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The article Why Level 3 Communications Got Crushed originally appeared on Fool.com.Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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