Level 3 Communications Q4 2009 earnings comments by D Klein 02/11/10


Not much to report that is promising, except to say that revenues appear to have stopped their downward trend. However the reversal was so small its difficult to see future top line growth exceeding single digits at best, and management is not telling since they stopped giving forward guidance, including it appears free cash flow projections.  Any growth assumes this one quarter represents a trend and given this managements track record its hard to get excited.  They did say their cap ex and operating costs will increase for 2010.

It’s difficult to see much growth in the near term just based on organic growth.  The only thing going for the company at this point would be a joint venture, or some type of M&A but this is pure speculation.

Jim Crowe has been trying to get some traction now for over a decade.  Its time for management to find a buyer or joint venture partner assuming anyone is still interested.  They have proven beyond any doubt they cannot grow the company from within.  I suspect this will eventually happen but this is just more speculation which is all LVLT has going for it, now, and for the last ten plus years.

The stock closed at $1.30 today and I don’t see much changing until there is more visibility on what the future holds for LVLT.  I would not invest any money in LVLT that one cannot afford to lose.  I would treat any buys at this time as gambling only IMO.  There is really not much else to say that could project growth and be well grounded in facts but speculation abounds.

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