Level 3's first-quarter 2014 earnings were driven again by Enterprise Core Network Services (CNS) revenue, which rose 11 percent year-over-year to $962 million.
Enterprise service revenues also contributed to CNS' 6.6 percent year-over-year revenue increase to $1.5 billion. Total revenue was $1.6 billion, up from $1.58 billion in the first quarter of 2013.
"The first quarter 2014 marks the ninth consecutive quarter of growth in Enterprise CNS revenue, which grew 11 percent year-over-year on a constant currency basis," said Sunit Patel, executive vice president and CFO of Level 3, in the earnings release. "We saw strength in the quarter in part due to turning up service ahead of schedule and better than expected usage revenue."
From a regional perspective, North America continues to lead the pack with $1.04 billion in revenues, up 8 percent year-over-year. While North America Wholesale revenues declined 1 percent to $368 million, Enterprise revenues rose 14 percent to $675 million.
The service provider also reported gains in both EMEA and Latin America, particularly in the Enterprise segment. EMEA Enterprise revenues rose 3 percent year-over-year to $225 million, while Latin America Enterprise revenues jumped 12 percent to $189 million.
Two of the highlights during the quarter were a number of new multinational corporation (MNC) customer wins and new technology partnerships. In March, Level 3 won a contract with Frankfurt-based Dematic and Cinemark Brazil. More recently, the service provider announced new partnership with Digital Realty Trust where it will provide the data center provider's customers in 14 U.S. and Europe access to Amazon Web Services (AWS Direct Connect) (NASDAQ: AMZN) and Microsoft Azure (NASDAQ: MSFT) (ExpressRoute).
Adjusted EBITDA was $458 million in the first quarter 2014.
Due to the strong CNS revenues and adjusted EBITDA, Patel said the company is updating its full-year 2014 outlook; it now expects to generate free cash flow in the range of $250 million to $300 million for the full-year 2014, up from its prior outlook range of $225 million to $275 million.
Shares of Level 3 were listed at $41.01, up $3.90 or 10.5 percent, in Wednesday morning trading on the New York Stock Exchange.
- see the earnings release
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