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Level 3's revenue rise in Q3 driven by core services

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Level 3 Communications (NYSE: LVLT) on Wednesday reported Q3 2012 revenues of $1.59 billion based on ongoing growth in its core network services unit.

Level 3 investor presentation

Click here for selected slides from Level 3's investor presentation.

The service provider reported that its Q3 net loss was $166 million, or $57 million excluding losses of $60 million related to interest rate swap agreements and $49 million related to the extinguishing of debt. This compared to a $62 million net loss in Q2 2012.

When looked at on a per-share basis, the net loss was $0.76, or $0.26 excluding the losses related to the interest rate swap agreements and the extinguishment of debt, compared to $0.29 for the second quarter 2012.

Meanwhile, consolidated adjusted EBITDA increased to $372 million in the third quarter 2012, compared to $353 million in the second quarter 2012.

Once again, the star performer in Level 3's portfolio was Core Network Services. During the quarter, Core Network Services revenues rose 1.1 percent sequentially over Q2 2012, to $1.39 billion.

Inside this segment, enterprise services grew 1 percent to $627 million from $621 million in Q2 2012. However, wholesale revenues declined from $382 million to $381 million.

On an international basis, Latin America reported that revenues rose 5 percent to $177 million, up from $169 million in Q2 2012. In EMEA, ongoing declines in UK government sales drove down sales 2 percent to $210 million.

"Strong growth in Latin America CNS revenue and continued growth in our enterprise business led to improved overall revenue performance this quarter," said Sunit Patel, executive vice president and CFO of Level 3, in the earnings release. "On a constant currency basis, total CNS revenue grew 1.1 percent compared to 0.7 percent in the second quarter."

Looking forward to Q4 and beyond, Patel said the company is retaining its previous guidance of Q4 revenue growth and meeting 20 to 25 percent adjusted EBITDA growth for the full year 2012. Patel added that they expect "capital expenditures for the full year 2012 to be approximately 12 percent of total revenue."

For more:
- see the release

Special report: Wireline telecom earnings in the third quarter

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