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Earnings reports

Level 3 Posts Q3

BROOMFIELD, Colo. -- Level 3 Communications, Inc. (NASDAQ:LVLT) reported consolidated revenue of $875 million for the third quarter 2006, compared to consolidated revenue of $835 million for the second quarter 2006. As the company completed the sale of its Software Spectrum, Inc. subsidiary in the third quarter of 2006, the results of operations of Software Spectrum are reflected as discontinued operations for all periods provided in this release and are not consolidated with the results of operations of Level 3's communications and other businesses.

The net loss for the third quarter 2006 was $138 million, or $0.12 per share, compared to a net loss of $201 million, or $0.23 per share, for the previous quarter. Included in the net loss for the third quarter is a gain of $33 million associated with the sale of Software Spectrum, or $0.03 per share. Included in the net loss for the second quarter 2006 was a loss of $55 million, or $0.06 per share, attributable to the amendment and restatement of the Level 3 Financing, Inc.'s $730 million credit agreement.

"Excluding the benefit of acquisitions during the third quarter, we had an approximately 6 percent growth in core communications services revenue," said James Q. Crowe, CEO of Level 3. "This positive outcome is the result of particularly strong contributions from transport and infrastructure and voice services, the ongoing stabilization in the pricing environment; and the positive impact of industry consolidation. The trend in organic growth bodes well for future performance, and the communications business saw positive contributions from the WilTel integration and other, more recent acquisitions."

Consolidated Adjusted OIBDA(1) defined as Adjusted Operating Income Before Depreciation and Amortization was $176 million in the third quarter 2006, compared to third quarter 2006 projections of $170 million to $190 million and $170 million for the second quarter 2006.

"Our favorable performance in core services revenue was offset by declines in SBC Contract Services revenues and higher operating expenses, which were primarily due to the acceleration of certain integration related expenses and increased costs attributable to the acquired companies," said Sunit S. Patel, CFO of Level 3.

Level 3 Communications Inc. (NYSE: LVLT)

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