Netflix: No Thanks - We'll Have Level 3 Instead
Focus Equity • 61 Comments
Focus Equity • 61 Comments
Apr. 29, 2015, 9:24 AM
- Level 3 Communications (NYSE:LVLT) is up 1.2% premarket after growing revenue and beating earnings expectations in Q1, while raising expectations for the full year.
- Adjusted EBITDA of $635M beat an expected $624M. EBITDA margin was 30.9%.
- Core network service revenue ($1.9B) by geography: North America, $1.54B (up 7% in constant currency); EMEA, $207M (down 1%); Latin America, $185M (up 6%).
- First-quarter capex was $254M, down from the prior $275M. Free cash flow was $51M, up from the prior year's -$9M (pro forma).
- The company raised guidance for 2015: EBITDA growth is now expected to come in at 14%-17%, up from 12%-16%. Free cash flow is expected at $600M-$650M, up from a previous $550M-$600M.
- Conference call at 10 a.m. ET.
Apr. 29, 2015, 8:03 AM
- Level 3 (NYSE:LVLT): Q1 EPS of $0.35 beats by $0.02.
- Revenue of $2.05B (+2.5% Y/Y) misses by $10M.
Apr. 28, 2015, 5:30 PM
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Apr. 28, 2015, 4:41 PM
- Level 3 Communications (NYSE:LVLT) completes an offering of $1.5B in privately offered senior notes ($700M in 5.125% notes due 2023, and $800M in 5.375% notes due 2025).
- The company's issued a redemption notice for holders of its 8.125% senior notes (due 2019) and a separate notice to holders of 8.875% senior notes (due 2019), with redemptions scheduld for May 28.
Apr. 14, 2015, 7:36 PM
- Level 3 Communications (NYSE:LVLT) has priced $1.5B in its privately offered senior notes.
- The firm agreed to sell $700M in 5.125% notes due 2023, and $800M in 5.375% notes due 2025.
- Net proceeds will go to retire $1.2B in 8.125% notes due 2019, and $300M in 8.875% notes due 2019.
- The offer should be completed April 28.
Apr. 14, 2015, 9:20 AM
- Level 3 Communications (NYSE:LVLT) will offer $1.2B in senior notes in a private offering through its financing subsidiary, to roll over its 8.125% debt due 2019.
- The debt is senior unsecured notes that would mature in 2023 and 2025. It would be applied to redeem all $1.2B in the 2019 notes.
Mar. 12, 2015, 10:33 AM
- Level 3 Communications (LVLT +0.9%) is adding collaboration services to its Cloud Connect offering, starting with a partner in videoconferencing firm Blue Jeans Network.
- The move will let customer enterprises get access to cloud-based communication offerings through a single network connection.
- It's an effort to tap into a growing market for cloud videoconferencing that Frost & Sullivan says will grow in revenue from $113.7M in 2013 to $344.1M in 2019.
- Level 3's Cloud Connect is a private network offering physically isolated from the public Internet, to ensure delivery reliability. The company added to its cloud offering by absorbing TW Telecom's product Constellation via acquisition on Oct. 31.
Feb. 4, 2015, 11:56 AM
- Level 3 Communications (NYSE:LVLT) is up 3.9%, changing course from a down premarket after its Q4 EPS beat expectations despite missing revenue projections.
- The firm provided metrics breakouts for TW Telecom, which Level 3 acquired on Oct. 31: Q4 revenue of $433M (Data and Internet, $271M; Voice services, $78M; Network Services, $53M; Taxes and fees, $26M; Intercarrier compensation, $5M).
- TW Telecom contribution to levered free cash flow: $27M.
Feb. 4, 2015, 9:07 AM
- Level 3 Communications (NYSE:LVLT) grew revenues in all regions but missed expectations by about 3% and is trading down 3.6% premarket.
- The company guided for 2015 adjusted EBITDA growth of 12-16% from 2014's $2.271B, and for free cash flow in the coming year of $550M-600M. Capex should be about 15% of total revenue.
- Q4 Core Network Services revenue came to $1.5B; Wholesale Voice and Other to $137M.
- Network revenue breakdowns: North America, $1.09B (up 6%; $364M wholesale, $724M enterprise); EMEA, $218M (up 1%; $75M wholesale, $143M enterprise); Latin America, $191M (up 4%; $41M wholesale, $150M enterprise).
- Q4 Free cash flow of $163M, down $34M from the prior year. Full-year cash flow was $325M, vs. a a prior -$47M.
- For the full year: a swing to net income of $293M from the prior year's $109M loss.
- Level 3's consolidated results include two months of TW Telecom's, since the company closed the TW Telecom acquisition Oct. 31.
Feb. 4, 2015, 8:04 AM
- Level 3 (NYSE:LVLT): Q4 EPS of $0.35 beats by $0.04.
- Revenue of $1.91B (+19.4% Y/Y) misses by $60M.
Feb. 3, 2015, 5:30 PM
Jan. 21, 2015, 9:17 AM| Jan. 21, 2015, 9:17 AM | 1 Comment
Jan. 14, 2015, 1:52 PM
- Level 3 (LVLT +0.1%) plans to sell $500M worth of senior unsecured notes due 2023. Net proceeds, along with cash on hand, will be used to redeem 9.375% senior notes due 2019 ($500M aggregate principal).
- Fitch has rated the new debt BB (non-investment grade speculative). The firm observes Level 3 "remains committed to operate within its 3x to 5x net leverage target," and forecasts its free cash flow will grow to nearly 10% of revenue (from 4%-5% in 2014) in 2016, with recently-acquired TW Telecom's help.
- Thanks to an improving credit profile and favorable corporate debt markets, Level 3 has been aggressively refinancing in recent years.
Nov. 26, 2014, 11:55 AM
- ZAYO has received 11 bullish ratings on underwriter coverage day, and no neutral or bearish ones.
- Goldman (Buy, $30 target) calls the fiber network owner "a pure-play opportunity on 20%+ secular growth in data traffic expected over the next few years," and thinks the market for fiber infrastructure service can post a 7% CAGR through 2020. "Our [sum-of-the-parts] analysis suggests the market is giving little credit to revenue visibility and incremental margins of the physical infrastructure business."
- "Zayo owns one of the largest collections of fiber in the U.S. and primarily targets customers with heavy and complex bandwidth needs," says Morgan Stanley. "Consolidated adjusted EBITDA margins for Zayo are ~58%, meaningfully higher than its peers due to its focus on the higher margin products like dark fiber (~70% margins) ... Even if individual product margins remain flat, consolidated margins can grow due to a mix shift."
- MS also observes the fiber services market has seen huge consolidation, and that mobile, cloud, and online video traffic growth is boosting demand.
- Zayo now +39% from October's $19 IPO price. Peers Level 3 (LVLT +1%) and Cogent (CCOI +1.8%), for whom many of the bullish arguments for Zayo also apply, are trading higher.
Nov. 25, 2014, 12:02 PM
- "At $50+, we feel that the Street is getting too complacent about potential integration risks and about sustained long-term revenue momentum," says Macquarie's Kevin Smithen, downgrading Level 3 (LVLT -2.7%) to Neutral.
- Smithen: "We like the company, but we believe the stock should trade at no more than 16x our '17 FCF est. at the end of FY16. That equates to 11.9% potential upside over two years."
- Smithen only upgraded Level 3 on Aug. 27. Shares had risen 16% since.
Nov. 17, 2014, 11:24 AM
- Level 3 (LVLT -0.5%) plans to offer $600M worth of senior notes due 2022. Net proceeds, along with cash on hand, will be used to redeem $605.2M worth of 11.875% senior notes due 2019.
- Last month, Level 3 took out a $2B loan to help finance the cash portion of the TW Telecom merger, and to refinance some of TW's debt.
- Level 3 had $9.4B in debt at the end of Q3, $729M in cash, and $1.04B in restricted cash/securities.
Level 3 Communications, Inc. provides a range of integrated communications services, non-switched and local-access telecommunications services. It provides IP-based communications services to enterprise, content, government and wholesale customers. The company products include Content... More
Industry: Diversified Communication Services
Country: United States
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