Level 3 Communications (LVLT) is a global communications provider headquartered in Broomfield, Colorado, that provides communications services to enterprise, government and carrier customers in more than 60 countries around the world. Level 3 operates one of the world’s largest Internet backbones.
LVLT and tw telecom stockholders approved the acquisition of TWTC by LVLT on October 28, 2014. All financial numbers in this review will be pro forma for the full quarters before this date and the partial pro forma fourth quarter results are adjusted to pro-forma for the entire quarter.
LVLT announced 2Q15 results on July 29 and the market was not pleased. The stock closed at 52.50 the day before and hit a low of 47.08 on earnings day; a drop of over 10% before closing at 49.39. The question might be is there a fundamental change in the company or is this driven by short term thinking on a single quarter.
This article’s focus is on revenue but will touch on EPS, FCF (free cash flow) and EBITDA.
CNS Revenue Concerns?
Based on comments I’ve read on stock boards the consensus of concern seems to be revenue growth accelerating. Same concerns surfaced on the conference call: