Level 3 CNS revenues climb to $1.4B, helping narrow losses

Level 3 Communications (NYSE: LVLT) reported that Core Network Services (CNS) revenue was a key growth factor, rising 1.7 percent sequentially to $1.4 billion.

Inside CNS, the service provider's enterprise services segment, including the EMEA UK Government unit, grew 7.4 percent year-over-year and 3.1 percent sequentially to $905 million. It reported that transport and fiber and IP and data services revenues were $491 and $502 million, respectively.

"We had another solid quarter, with continued growth in enterprise Core Network Services revenue," said Jeff Storey, president and CEO of Level 3, in the earnings release. "Our secure and reliable solutions are helping our customers manage the complexities of their IT environments."

On a regional basis, North America was again the leader with $987 million in total revenues. While EMEA saw enterprise and wholesale revenues rise to $88 and $102 million, respectively, they were impacted by slow UK government sales, which declined to $32 million. Finally, Latin America CNS enterprise revenues rose 13.1 percent to $149 million.  

The company did report a number of losses, particularly in the wholesale segment, which declined to $492 million.

From an overall financial perspective, Level 3 reported total revenue of $1.56  billion, down from $1.59 billion from Q3 2012, but up sequentially from $1.57 billion in Q2 2013.

It also narrowed its losses to $21 million, down from $166 million in the same period a year ago.   

Financial challenges continued to be an issue for Level 3 during the quarter. In an effort to cut costs and pave a path to become profitable, the service provider announced earlier in the quarter that it would lay off 700 of its employees worldwide.

Looking toward the fourth quarter, Sunit Patel, CFO of Level 3, said they expect "stronger sequential growth in Adjusted EBITDA, from the starting point of $415 million in the third quarter." 

For the full year 2013, Level 3 said it expects positive free cash flow, excluding payments related to interest rate swap agreements of approximately $45 million. 

Shares of Level 3 were trading at $29.28, up $2.26, or 8.36 percent, in morning trading on the New York Stock Exchange.

For more:
- see the release

Earnings summary: Wireline telecom earnings in the third quarter of 2013

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