DENVER-
Communications network operator Level 3 Communications Inc. said Thursday its first-quarter net loss widened, citing a $427 million charge related to debt restructuring.
Its stock fell 6 percent in midday trading but remained closer to the high end of its 52-week price range.
Level 3, which sells Internet services to companies ranging from AT&T and Alltel to Verizon, completed the restructuring as it works to integrate seven recently acquired companies into its operations.
During a conference call with analysts, company executives said they were pleased with the results, particularly the debt restructuring and the ongoing integration.
“While we see opportunities to improve our balance sheet, we think those are generally at the margin, and we think the heavy lifting is behind this,” Chief Executive Officer James Crowe said.
Janco Partners analyst Donna Jaegers said she was glad the company completed the debt restructuring and noted that demand for business seems strong. “On the top line, it seems like they’re managing to do OK,” she said.
She speculated the stock fell Thursday because Level 3 revised its second-quarter guidance for EBITDA, or earnings before interest, taxes, depreciation and amortization.
The company based in suburban Broomfield forecast second-quarter revenue of $1 billion to $1.05 billion, including core communications revenue ranging between $890 million and $910 million. Analysts surveyed by Thomson Financial have projected $1.48 billion.
Level 3 forecast second-quarter EBITDA at $180 million to $200 million, which compared with $170 million in the first quarter.
For the quarter ended March 31, the company reported a net loss of $647 million, or 44 cents a share, which compared with a net loss of $168 million, or 20 cents a share, in the year-ago quarter.
Revenue increased to $1.06 billion from $822 million in the first quarter of 2006.
The most recent quarter included a $427 million loss, or 29 cents per share, to retire or refinance about $3 billion in debt.
Analysts surveyed by Thomson Financial had forecast a net loss of 22 cents a share in the first quarter on revenue of $1.04 billion.
“We have made substantial integration progress and benefited from continued favorable industry conditions in terms of demand growth and pricing stability,” Chief Financial Officer Sunit Patel said.
Shares of Level 3 closed down 45 cents, or 7.3 percent, to $5.73 a share on the Nasdaq Stock Market. The price has ranged from $3.37 a share to $6.80 a share in the past year.
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