QUOTE AND NEWS
Cloud Computing  Jul 29  Comment 
BROOMFIELD, Colo. , July 29, 2014 /PRNewswire/ -- Level 3 Communications, Inc. (NYSE: LVLT) today announced that Level 3 Escrow II, Inc., its indirect, wholly owned subsidiary, has agreed to sell $1 billion aggregate principal amount of its...
SeekingAlpha  Jul 29  Comment 
Level 3 Communications, Inc. (NYSE:LVLT) Q2 2014 Earnings Conference Call July 29, 2014 10:00 AM ET Executives Valerie Finberg – VP, IR Jeffrey Storey – President and CEO Sunit Patel – EVP and CFO Analysts Colby...
TheStreet.com  Jul 29  Comment 
NEW YORK (TheStreet) -- Shares of Level 3 Communications  are up 3.9% to $46.67 today after the communications company posted higher than expected second quarter profit, citing gains in its core network services revenue in North America and...
Market Intelligence Center  Jul 29  Comment 
After the Open... Major indices came out of the gate moving slightly higher on Tuesday morning. Merck (MRK), Level 3 (LVLT) and International Paper (IP) all beat earnings expectations, but BP (BP), National Oilwell Varco (NOV) and Questcor...
Wall Street Journal  Jul 29  Comment 
Level 3 Communications reported a profit in the second quarter, driven by gains in its core network services revenue in North and Latin America. The company's results surpassed market expectations.
SeekingAlpha  Jul 25  Comment 
By David Klein: On June 16, 2014 Level 3 Communications (NYSE:LVLT) and tw telecom (NASDAQ:TWTC) announced Level 3 will acquire tw telecom in a stock-and-cash transaction which we examined in our last article. We projected pro-forma results over...
Cloud Computing  Jul 24  Comment 
TelVue® Corporation (PINKSHEETS: TEVE), the innovation leader in Internet and Television Broadcasting services for communities, cable operators, and media companies, has significantly upgraded its hosted broadcasting and cloud video services with...
Motley Fool  Jul 23  Comment 
In this "Ask a Fool" segment of The Motley Fool's "This Week in Tech," we answer a reader question about Level 3 Communications.
Telecom Ramblings  Jul 23  Comment 
Level 3's federal team has landed a high profile Network-as-a-Service contract.  The Department of Homeland Security has awarded them a multi-year, multi-million dollar contract for LAN managed services under WITS-3 in the National Capital...
newratings.com  Jul 22  Comment 
WASHINGTON (dpa-AFX) - Level 3 Communications, Inc. (LVLT) Tuesday announced its planned executive management team, pending its announced acquisition of tw telecom. The new team will include executives from both Level 3 and tw...




 


Level 3 Communications (NYSE: LVLT) is a provider of a range of integrated communications services including network and Internet services, colocation service, media services and voice services. Its operations are divided into communications and coal mining.[1] Its largest segment, communications, consists of Core Network Services, Wholesale Voice Services, and Other Communications Services.[2] Its operations are primarily located in North America and Europe. As the demand for online video, gaming, and the streaming of movies and live events continues to rise, providers of these services are striking long-term contracts to IP Upstream carriers. Reaching deals with streaming companies has been critical to Level 3’s revenue growth. [3]

Business Growth

Level 3 reported a loss of $622 on $3.65 billion in 2010 revenues, compared to a loss of $618 million on $3.76 billion in revenues in 2009.[4] The declines in profitability and revenues can be partially attributed to a decline sales from large companies. In addition, expenses have risen as a result of high interest costs associated with the company’s debt load. However, contracts with companies providing streaming services has the potential of providing new sources of revenue growth.[5]

Trends and Forces

Visual streaming services provides new growth area for diversified communications companies

Increases in consumer demand for online video, online gaming, streaming full-length movies and lives events has the potential of providing significant growth opportunities for communication services providers. In 2010, Americans spent as much time online as they did watching TV, and Level 3 expects that the amount of time spent streaming online to increase.[6] Level 3’s broadcast services network and Vyvx capabilities delivered approximately 15,000 video feeds month as well as major live events like the Super Bowl, which the network has delivered for the past 22 years. In 2010, Level 3 Communications’ IP Upstream service was selected to be a primary content delivery network (CDN) for Netflix's fast-growing streaming service.[7] However, this rapid growth is not without its costs. Level 3 says it will double its storage capacity to help accommodate the new contract. Expanding its services has the potential of forcing the company to increases its debt load, which would lead to significantly higher costs.[8]

Global Economic Crisis has forced many customers to cut or delay several communication services

In an effort to control or reduce costs, many of Level 3’s customers have deferred or foregone purchases of services.[9] In addition, customers have also had trouble making periodic payments. As a result, there has been a decline in demand for communication services, which has resulted in lower revenues for Level 3. Meanwhile, utility costs have remained relatively stable for communication companies, leading to tighter margins.[10] However, as the result of a gradual pick up in economic activity, Level 3’s profit margins on the Core Network Services have improved.[11] Increased economic activity has the potential of leading to increased revenues and profits on Level 3’s core operations.[12]

Telecommunications Companies

While rising demand for IP Upstream services provides a new growth opportunity, a slow economic recovery has led to decline in demand for many other services provided by diversified communication companies. In addition, competition for fewer contacts for many networking services has led to depressed margins.

LVLT's top three competitors in telecommunications are:[13]

References

  1. Reuters.com: Company profile for LVLT
  2. Reuters.com: Company profile for LVLT
  3. LVLT Company 10-K for 2010
  4. Morningstar.com: financials for LVLT
  5. LVLT Annual Report for 2010
  6. LVLT Annual Report for 2010
  7. Yahoo! Finance: Netflix/Level 3 Deal Underscores Communication Service Trends
  8. Yahoo! Finance: Netflix/Level 3 Deal Underscores Communication Service Trends
  9. Yahoo! Finance: Netflix/Level 3 Deal Underscores Communication Service Trends
  10. Yahoo! Finance: Netflix/Level 3 Deal Underscores Communication Service Trends
  11. Yahoo! Finance: Level 3 1Q loss narrows
  12. Yahoo! Finance: Level 3 1Q loss narrows
  13. Hoovers: LVLT Competitor Fact Sheet. Retrieved on June 20, 2008.
  14. WikInvest: Sprint Nextel. Retrieved on June 26, 2008.
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