Level 3's Q4 revenue benefitted by 1.8 percent CNS increase

Level 3 Communications (NYSE: LVLT) reported on Tuesday that Q4 revenue rose $1.59 billion year-over-year as it saw gains in both its Core Network Services and Enterprise CNS revenues.

The service provider reported that Q4 2012 net losses were 16 cents per share, excluding what it says was a loss on the extinguishment of debt of 23 cents per share and a benefit from special items recognized in the fourth quarter 2012 of 13 cents per share. It also narrowed its losses to $56 million on both a sequential and year-over-year basis from $166 million in Q3 2012 and $163 million in Q4 2011, respectively.

Total revenue for the full year 2012 was $6.38 billion, up from $6.31 billion pro forma for the full year 2011.

Here's a breakdown of Level 3's key metrics:

  • Core Network Services: CNS revenues grew 1.8 percent sequentially and 4.7 percent year-over-year to $1.42 billion. Inside CNS, wholesale revenue grew to $520 from $513. For the year 2012, CNS revenue rose to $5.59 billion, up from $5.42 billion from full year 2011. From a geographic standpoint, Level 3 saw gains in North America, EMEA and Latin America. North America and EMEA revenue were $1.02 billion and $217 million, an increase of 1 percent over Q3 2012. Latin America, however, had the largest gain of 5 percent, where revenues rose to $183 million, up from $177 million in Q3 2012.
  • Enterprise CNS: During the quarter, Enterprise CNS revenue rose by 2.2 percent sequentially and 7.8 percent year-over-year to $911 million from $889 million and $851 million respectively.

"CNS revenue performance strengthened this quarter as expected, with overall CNS revenue growth on a constant currency basis of 1.8 percent sequentially and 4.7 percent year-over-year," said Sunit Patel, executive vice president and CFO of Level 3, in the earnings release.

Another key milestone Level 3 made in Q4 was the continued integration of Global Crossing. The service provider laid off 4 percent of its employees, in addition to increasing its sales force, adding more global on-net buildings and introducing a new set of managed service offerings.

For the year 2013, Patel said the company expects to report "stronger sequential CNS revenue growth." However, in Q1 2013, he said the company expects to see a slight decline in CNS revenue over Q4 2012.

Shares of Level 3 were trading at $21.55, down $3.12 or 12.63 percent, in morning trading on the New York Stock Exchange.

For more:
- see the release

Special report:  Wireline telecom earnings in the fourth quarter of 2012

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