Level 3 Integration Aches Continue
For the third quarter, the company posted a net loss of $174 million, or 11 cents a share, on sales of 1.06 billion. That compares with a loss of $138 million, or 12 cents a share, on revenues of $875 million for the year-ago quarter.
While the company slightly beat analyst estimates, it lowered its full-year 2007 adjusted EBITDA forecast to a range of $813 million to $833 million from a previous forecast of $860 million to $920 million. Level 3 also expects 2008 adjusted EBITDA of $950 million to $1.1 billion, which is lower than its previous forecast of $1.15 billion to $1.3 billion.
For the fourth quarter, Level 3 expects sales of $930 million to $950 million.
Level 3 blamed its troubles on the difficulty of integrating acquisitions such as Telcove, ICG, Progress Telecom, and Broadwing.
The company says that each of the companies employed a different provisioning system, which it tried to consolidate through its Project Unity initiative. However, the company says some implementation decisions made achieving its provisioning throughput targets more difficult, which it is trying to correct.
As a result, Level 3 has organized all provisioning authority and responsibility under Neil Hobbs, president of Global Network Services.
The company also appointed Raouf Abdel, president of Business Markets Group, to work with Hobbs and align Level 3's marketing and sales activities with its provisioning capabilities.
This is not the first time Level 3 has blamed integration problems. In the second quarter, the company cited integration issues for weaker-than-expected results. (See Level 3 Feels Integration Irritation and Level 3 Reports Q2.)
Shares of Level 3 plummeted after its earnings report, falling $0.93 (21.53%) to $3.38 in late afternoon trading.
— Ryan Lawler, Reporter, Light Reading