Level 3 Communications, Inc. (NYSE:LVLT) posted results for 3Q2016, wherein the total revenue came at $2.033 billion against $2.037 billion and $2.062 billion, on a modified and reported basis, for 3Q2015, respectively. The modified results discount the results from the firm’s Venezuelan subsidiary’s businesses that was deconsolidated at close of September 2015.
The highlights
Jeff Storey, the CEO and President of Level 3, said that they continued to multiply margins and recorded solid free cash flow. At the same time, the CEO said that they witnessed softer revenue growth in the reported quarter. The company is focused on offering the best customer experience and enhancing execution in the near term.”
In 3Q2016, the firm reported net income of $143 million, diluted EPS of $0.39 and basic EPS of $0.40. For 3Q2015, net income was $1 million and diluted and basic EPS were $0.00. The report of 3Q2015 included an expense of $171 million, or around $0.48 EPS linked to the deconsolidation of the firm’s Venezuelan subsidiary’s businesses. Excluding this charge, basic EPS was $0.48 per share for 3Q2015.
As of September 30, 2016, the firm had cash and equivalents of $1.569 billion. Sunit Patel, the CFO and executive VP of Level 3, reported that they are reiterating outlook of 10% to 12% adjusted EBITDA growth and free cash flow of $1 billion to $1.1 billion for FY2016.
Year-to-date company’s capital expenses have been higher than expected at the start of the year, led by increased client demand. As a result, the company now project capital expenditures to be nearly 16% of total revenue for FY2016, compared to previous outlook of around 15% of total revenue and they have updated projected depreciation and amortization cost for the improved level of capital costs.
Level 3 has updated its FY2016 outlook for non-cash compensation cost. In 3Q2016, net income came strong at $143 million compared to net income of $1 million in 3Q2015. It also reported strong growth in adjusted EBITDA of 12%, on a modified basis. The firm generated robust cash flows from operating segment of $645 million while free cash flow came at $281 million.
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