Post Earnings Coverage as Level 3 Communications’ Q4 Earnings Beat Estimates

Upcoming AWS Coverage on Cable One Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 28, 2017 / Active Wall St. announces its post-earnings coverage on Level 3 Communications, Inc. (NYSE: LVLT). The Company reported its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on February 08, 2017. The Broomfield, Colorado-based Company’s diluted EPS declined on a year-over-year basis; however, it outperformed market consensus estimates. Register with us now for your free membership at:

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One of Level 3 Communications’ competitors within the Diversified Communication Services space, Cable One, Inc. (NYSE: CABO) issued a press release reporting its results before market open on Tuesday, February 28, 2017. The Company will host a conference call with the financial community to discuss results for Q4 and full year 2016 today at 11 a.m. ET. AWS will be initiating a research report on Cable One in the coming days.

Today, AWS is promoting its earnings coverage on LVLT; touching on CABO. Get our free coverage by signing up to:

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Earnings Reviewed

During the quarter ended on December 31, 2016, Level 3 Communications reported total revenue of $2.03 billion compared to $2.05 billion recorded at the end of Q4 FY15. Total revenue numbers for Q4 FY16 lagged behind market consensus estimates of $2.07 billion.

The internet and telecommunications Company’s net income stood at $250 million, or $0.69 per diluted share, in Q4 FY16 compared to $3.32 billion, or $9.24 per diluted share, in Q4 FY15. Wall Street had expected the Company to report net income of $0.44 per diluted share. Furthermore, the Company’s Q4 FY15 net income included a non-cash benefit from income tax expense of approximately $3.3 billion related to the release of its valuation allowance against US federal and state deferred tax assets.

In FY16, Level 3 Communications’ revenue came in at $8.17 billion compared to $8.23 billion in the previous year’s same period. The Company reported net income of $677 million, or $1.87 per diluted share, in FY16 versus $3.43 billion, or $9.58 per diluted share, in FY15.

Operational Metrics

During Q4 FY16, Level 3 Communications’ total costs and expenses were $1.68 billion versus $1.72 billion in the prior year’s comparable quarter. The Company’s operating income for Q4 FY16 came in at $354 million compared to $338 million in Q4 FY15. The Company reported adjusted EBITDA of $709 million for Q4 FY16 versus $681 million in last year’s corresponding quarter. Additionally, adjusted EBITDA margin as a percentage of revenue improved during Q4 FY16 to 34.9% from 33.2% in the same period last year.

Segment wise

Core Network Services (CNS) Segment

Level 3 Communications’ CNS segment revenue came in at $1.93 billion in Q4 FY16 compared to $1.94 billion in Q4 FY15. The segment’s wholesale revenues were down by 7.6% during Q4 FY16 to $497 million from $538 million in Q4 FY15. Meanwhile, the segment’s enterprise revenues grew 2.3% in Q4 FY16 to $1.44 billion from $1.41 billion in the previous year’s same quarter.

Geographical Contribution

North American region contributed $1.58 billion to CNS segment’s revenues, up 0.8% in Q4 FY16 from $1.57 billion in Q4 FY15. EMEA regions’ revenue declined 15.1% to $180 million in Q4 FY16 from $212 million in the prior year’s comparable quarter. Meanwhile, revenues from Latin America regions were up by 6.9% in Q4 FY16 to $170 million from $159 million in Q4 FY15.

Wholesale Voice Services

The Company’s Wholesale Voice Services segment’s revenue fell 10.9% during Q4 FY16 to $98 million from $110 million in Q4 FY15.

Cash Flow & Balance Sheet

During Q4 FY16, net cash provided by operating activities was $557 million compared to $556 million in the prior year’s same period. During the reported quarter, the Company’s free cash flow was $251 million compared to $226 million in Q4 FY15. Furthermore, the Company reported unlevered cash flow of $386 million in Q4 FY16 versus $399 million in Q4 FY15.

At the close of books on December 31, 2016, Level 3 Communications had $1.82 billion in cash and cash equivalents compared to $854 million at the close of books on December 31, 2015. The Company’s long-term debt stood at $10.88 billion as on December 31, 2016, compared to $10.87 billion as on December 31, 2015.

Outlook

In its guidance for FY17, Level 3 Communications management expects adjusted EBITDA to be in the range of $2.94 billion to $3.00 billion. Furthermore, the Company anticipates free cash flow during FY17 to be between $1.10 billion and $1.16 billion.

Stock Performance

On Monday, February 27, 2017, Level 3 Communications’ share price finished the trading session at $57.63, slightly up by 0.03%. A total volume of 2.33 million shares exchanged hands, which was higher than the 3 months’ average volume of 2.20 million shares. The stock has surged 16.57% and 1.87% in the last six months and past three months, respectively. Furthermore, since the start of the year, shares of the Company have gained 2.25%. The stock is trading at a PE ratio of 30.83 and currently has a market cap of $20.80 billion.

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