Level 3 Communications (NYSE: LVLT) reported Wednesday that while continuing core network growth contributed to its $1.59 billion in revenue--$62 million less than the same period a year ago--as sluggish UK government sales drove a wider than expected loss.
Click here for selected slides from Level 3's investor presentation.
Driven by strong enterprise sales, Core Network Services (CNS) continued to be a strong performer in Level 3's portfolio, growing 0.7 sequentially to $1.39 billion. North America's CNS revenues grew 1 percent.
"Our North America and Latin America businesses performed well this quarter, with CNS revenue growth of 1.1 percent and 2.3 percent on a constant currency basis, respectively," said Sunit Patel, executive vice president and CFO of Level 3.
However, EMEA CNS sales, particularly in the UK, declined 2 percent from $219 million to $214 million. UK government sales declined 13 percent to $42 million.
Weak UK government sales contributed to its $62 million, or 29 cents per share, net loss. However, the loss was much narrower than the $138 million net loss it reported in the first quarter of 2012.
"Our EMEA business performance was weaker, primarily due to the expected declines in U.K. government revenue," Patel said.
The service provider forecasts that CNS revenues, which contribute 80 percent to its overall sales, will grow sequentially for the rest of the year.
Shares of Level 3 were trading at $18.44, down $1.98, or 9.7 percent, in after-hours trading on the New York Stock Exchange (NYSE).
- see the earnings release
- Reuters has this article
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