Level 3 Communications (NYSE:LVLT, news, filings) is going to be looking for some new leadership this year, as the company has just announced that its CEO James Q. Crowe is planning to transition out of that role by the end of 2013. The company's board of directors has formed a transition planning committee to help identify the next CEO. The exact timing of Crowe's departure is subject to change "at the Board's discretion in consultation with Mr. Crowe", which likely means that it will happen whenever the new guy or gal is ready to step in.
Crowe has been the driving force behind Level 3 since the beginning, riding high in the the dot-com years, surviving the bursting of the bubble, weathering the telecom nuclear winter, and helping to drive the multiple waves of consolidation since. After Genuity, WilTel, Broadwing, Global Crossing, and a host of others, Level 3 is a much bigger place now than it was 15 years ago; but more importantly it is still here - unlike so many others.
The company has fought doggedly to grow into its once out-sized debt load, and is now at long last on the cusp of becoming sustainably both free cash flow and earnings positive. As a result, whoever takes over will have an easier job than that which has gone before. Not easy mind you, just easier. The timing makes a lot of sense, as the integration of Global Crossing is over the hump, no imminent external dangers are at hand, and a fresh start and new perspective just might really help the company find that higher gear it has been looking for when it comes to revenue growth.
There will be speculation that Level 3's earnings report last month precipitated the timing of this change, and it's probably not that far off given his status as a lightning rod for increasingly impatient investors. But most who have followed the company the way I have have been expecting a transition announcement to hit sooner or later anyway. The only question now is whether the company's board of directors and the large investors that largely control it will look for outside blood or simply elevate Jeff Storey.
The other thing that will come up more seriously this year than in the past is perhaps Level 3 as an acquisition target itself. I still doubt that is in the cards, but it's not nearly as unthinkable anymore with the balance sheet more, err, balanced. We shall see.
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