Level 3 Communications: Growth Is Not As It Seems


Level 3 Communications (LVLT) has been attempting to grow through acquisitions over the years. Beginning with the late-2005 acquisition of WilTel, Level 3 has established itself as an industry consolidator. During 2006, the company went on to acquire Progress Telecom, ICG, TelCove and Looking Glass Networks. In 2007, Level 3 acquired Broadwing, the Content Delivery Network services business of SAVVIS, Inc. and Servecast but the crown jewel is there latest acquisition of Global Crossing. Many believe the GLBC acquisition could be the catalyst LVLT has been looking for to kick-start growth, returning it to valuations of past.

Digging through SEC filings, LVLT press releases and/or financial sites one can plot top line growth along with other metrics. The graph below represents a visual for growth highlighting both revenue and EBITDA.

2012 numbers are projected based on guidance combined with actual results to date. 2010 and 2011 reflect pro-forma numbers for Global Crossing.

The graph looks upbeat, showing an upward trend. Management reinforced this view with the following guidance from the Q2 press release:…Click here to continue reading the full article at SA…

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