Stock Alert for eOn Communications Corp. (EONC)
  • Stock Alert for FiberTower Corp. (FTWR)
  • Stock Alert for Clearwire Corp. (CLWR)
  • " />

    Stock Alert for Level 3 Communications Inc. (LVLT)

    Level 3 Communications Inc. (LVLT) is an international provider of fiber-based communications services. Since 1998, the Company has been focused on delivering premier services over one of the world’s most advanced, IP-optimized networks. LVLT owns and maintains over 54,000 intercity route miles. It offers a comprehensive portfolio of network offerings that spans Internet Protocol (IP) services, broadband transport, colocation services, and patented Softswitch-based managed modem and voice services. It also uses these network services as a foundation for delivering enterprise telecommunications solutions.

    Share Statistics (28-July-11)   FY












    Symbol LVLT Revenue, $Mn 3,762.00 3,651.00 -3.0% 910.00 929.00 2.1%
    Current price $2.19 Gross marg. 58.4% 59.2% 1.4% 57.9% 60.0% 3.6%
    52wk Range: $0.83-$2.67 Oper. margin -4.1% -2.6%
    Avg Vol (3m): 41,054,300 Net margin -16.4% -17.0% 3.7% -26.2% -22.1% -15.6%
    Market Cap. 3.73B              
    Shares Outstanding 1.70B EPS, $ -0.38 -0.35 -7.9% -0.12 -0.11 -8.3%

    Source:, SEC Filings.

    Recent News

    Shares of LVLT dropped 2.74% to $2.17 on Wednesday after the provider posted a net loss of $181 million, or $0.11 cents a share, for the second quarter of 2011.  That compares to a net loss of $169 million, or $0.02 a share, in the same quarter last year.  The second quarter net loss included a $0.02 per share charge of $23 million on the extinguishment of debt and $14 million in costs associated with its deal to acquire Global Crossing.  LVLT announced in April a definitive agreement to acquire Global Crossing Ltd. in a tax-free, stock-for-stock transaction.

    LVLT reported consolidated adjusted EBITDA of $226 million in the second quarter of 2011, up from $225 million in the first quarter of 2011 and up from $209 million in the comparable quarter last year.  This year’s second-quarter figure included $8 million in costs associated with the Global Crossing transaction.

    For the quarter, consolidated revenue was $932 million, which compares to consolidated revenue of $929 million in the previous quarter and $908 million in the second quarter of last year.

    Sunit Patel, executive VP and CFO of LVLT, said the Company saw Core Network Services revenue increase 1.7% sequentially on a constant currency basis, demonstrating continued improvement in LVLT’s overall rate of Core Network Services growth.  According to him, the Company saw particular strength from wireless, content, financial services and government customers during the quarter, with gross margin improving almost 2% to $566 million on sequential basis.

    Looking forward, LVLT continues to expect sequential revenue growth in Core Network Services revenue for the rest of 2011 and low double-digit consolidated adjusted EBITDA growth this year as compared to 2010.  Capital expenditures are expected to be about 12% of Communications revenue for the full year 2011, and Free Cash Flow is expected to be roughly breakeven for the last three quarters of 2011 in aggregate. CFO Patel said these expectations do not include any effect from the pending Global Crossing acquisition, which the Company continues to expect to close before the end of the year.

    LVLT shares traded as much as 2.7% higher yesterday on volume of 8.54 million shares.  The stock has been moving within a range of $0.83 – $2.67 over the past 52-weeks.  It is currently trading below its 50-day moving average of $2.32 and below its 200-day moving average of $1.73. Market capitalization currently stands at $3.73 billion and it has 1.70 billion outstanding shares.

    Financial Strength (28-July-2011)




    S&P 500

    Quick Ratio (MRQ) 1.13 1.46 0.64
    Current Ratio (MRQ) 0.97 1.22 1.59 1.01
    LT Debt to Equity (MRQ) 49.04 41.02 120.34
    Total Debt to Equity (MRQ) 62.02 48.09 158.43
    Interest Coverage (TTM) -0.33 0.23 0.10 19.96

    Source:, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among 14 polled investment analysts. Against the Level 3 Communications Inc company.

    Analyst Detail






    No Opinion

    Latest 2 1 8 3 0 0
    4 weeks ago 2 1 8 3 0 0
    2 months ago 2 1 8 3 0 0
    3 months ago 2 1 8 3 0 0
    Last year 1 1 7 4 3 0

    The eight analysts offering 12-month price targets for LVLT have a median target of 2.00, with a high estimate of 3.00 and a low estimate of 1.00. The median estimate represents a -7.79% decrease from the last price of 2.17.


    Consensus Estimates Analysis

    # of Estimates




    1 Year Ago

    SALES (in millions)
    Quarter Ending Sep-11 12 945.03 955.00 932.00 923.70
    Quarter Ending Dec-11 12 956.61 968.00 937.10 934.10
    Year Ending Dec-11 13 3,761.70 3,800.00 3,692.00 3,744.41
    Year Ending Dec-12 13 4,119.68 6,767.00 3,708.00 3,846.59
    EARNINGS (per share)
    Quarter Ending Sep-11 12 -0.09 -0.08 -0.12 -0.10
    Quarter Ending Dec-11 12 -0.08 -0.07 -0.09 -0.10
    Year Ending Dec-11 13 -0.38 -0.31 -0.45 -0.39
    Year Ending Dec-12 13 -0.28 -0.11 -0.42 -0.36
    LT Growth Rate (%) 1 4.00 4.00 4.00 -7.00

    Technical Analysis



    LVLT is trading below its 20-day moving average. However, this moving average is trending higher which suggests that there has been buying interest in this stock.

    LVLT is within its Bollinger Bands. This is a normal condition suggesting that it is neither overbought nor oversold relative to the recent levels.

    The MACD for LVLT currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/
    July28-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    AT&T Inc. T 29.67 175.71B 12.47 11.64 1.39 1.38
    CenturyLink Inc. CTL 37.69 22.63B 14.33 13.76 1.27 1.29
    Cogent Communications Group Inc. CCOI 15.37 688.13M 219.57 41.54 2.56 2.02
    Verizon Communications Inc. VZ 36.16 102.30B 16.14 13.85 0.92 0.88
    Diversified Communication Services Median       11.74 n/a 1.45 n/a
    Level 3 Communications Inc. LVLT 2.19 3.73B n/a n/a 0.99 0.95

    Source: Thomson Financial

    DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

    The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

    Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

    Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

    Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

    We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

    To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

    We encourage you to invest carefully and read investment information available at the websites of the SEC at and FINRA at

    Leave a Reply

    Your email address will not be published. Required fields are marked *