BROOMFIELD, Colo.—Level 3 Communications Inc.’s fourth-quarter loss narrowed as the Internet network provider reduced older inventory and streamlined operations after integrating acquisitions.
The company on Thursday reported a loss of $91 million, or 6 cents per share, compared with a year-ago loss of $174 million, or 11 cents per share.
Analysts expected a loss of 11 cents per share, according to Thomson Financial.
Revenue edged up to $1.1 billion from $1.06 billion last year, surpassing Wall Street estimates for $1.08 billion.
Nevertheless, CEO James Crowe said he and four other top Level 3 executives would not receive bonuses for 2007.
Level 3 has been struggling to integrate a host of acquisitions into its operations. The company said it made changes to improve processes and systems.
“These actions have significantly reduced our aged backlog of signed sales orders, improved our customer experience, and paved the way to accelerate future revenue growth,” the company said in a statement.
The company pledged to be free cash flow positive by the end of the year, a goal within reach if it meets sales expectations, said Janco Partners analyst Donna Jaegers.
“The key questions going forward are, can they reaccelerate sales and continue to improve the provisioning process. We think they’re on a slow and steady path on both those tracks,” she said.
For the year, the company’s loss widened to $1.11 billion, or 73 cents per share, and revenue rose to $4.27 billion from $3.38 billion.
Looking ahead, the company still expected core communications service revenue to rise 8 percent to 13 percent, increasing as the year progresses. It expects earnings before interest, taxes, depreciation and amortization between $950 million and $1.1 billion.
Crowe said the slowing economy has not affected Level 3’s sales outlook so far. “We have not seen any indication of any softening in demand or any issues with respect to pricing that affect our view on the outlook for our ability to sell and market our services,” he said.
Executives said Level 3 increased its number of employees in the last three months of 2007 as it recruited salespeople but expects layoffs in 2008. During a conference call, executives declined to elaborate.
Meanwhile Level 3 said its search for a new finance chief is progressing. Chief Financial Officer Sunit Patel announced plans in October to resign as soon as a replacement is found.
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