Level 3 Communications Inc., the U.S. phone-network operator, posted its first quarterly profit since 2003 after cost cuts helped offset declining sales. The shares advanced.
Fourth-quarter net income was $44 million, compared with a $91 million loss a year earlier, Broomfield, Colorado-based Level 3 said today in a statement. On a per-share basis the company said it had a loss of 3 cents, beating the 9 cent average estimate of analysts surveyed by Bloomberg.
Level 3 announced plans in December to cut about 450 jobs in North America, or 8 percent of its workforce, as customers put off telephone and Web-service expansions amid the U.S. recession. Costs declined 14 percent in the fourth quarter, and Level 3 said it will reduce capital spending “significantly” this year to cope with the slowing demand.
Level 3 rose 16 cents, or 16 percent, to $1.16 at 9:41 a.m. New York time in Nasdaq Stock Market trading, the biggest intraday gain in a month. The shares had lost 67 percent in the past year before today.
Sales fell 4.6 percent to $1.05 billion. While revenue will continue to face “pressure,” earnings excluding interest, taxes, depreciation and amortization will probably increase this year, Level 3 said.
