Yesterday Level 3 Communications posted its Q1 2017 numbers, finding some growth on the enterprise front in the Americas. The combination with CenturyLink is expected to close during Q3, and sometimes there can be a bit of focus lost between announcement and closure, but so far Level 3 seems to be holding pretty steady. Here are the company’s numbers in some context:
| $ in millions | Q1/16 | Q2/16 | Q3/16 | Q4/16 | Q1/17 | Comments |
|---|---|---|---|---|---|---|
| – North America – Wholesale | 434 | 443 | 412 | 405 | 403 | More enterprise strength |
| – North America – Enterprise | 1167 | 1162 | 1160 | 1179 | 1191 | |
| – EMEA – Wholesale | 65 | 63 | 61 | 55 | 55 | Still pretty weak across the Atlantic |
| – EMEA – Enterprise | 107 | 110 | 104 | 108 | 106 | |
| – EMEA – UK Government | 19 | 18 | 17 | 16 | 14 | |
| – Latin America – Wholesale | 39 | 37 | 37 | 34 | 36 | Solid results from South America |
| – Latin America – Enterprise | 116 | 123 | 139 | 136 | 141 | |
| Total Core Network Services | 1,947 | 1,956 | 1,930 | 1,934 | 1,946 | Up sequentially again |
| – Wholesale Voice & Other | 104 | 100 | 103 | 98 | 102 | A bit stronger |
| Total Revenue | 2,051 | 2,056 | 2,033 | 2,032 | 2,048 | Meeting expectations |
| Network Access Costs | 694 | 676 | 675 | 680 | 691 | |
| Network Expenses | 331 | 339 | 337 | 332 | 336 | |
| Cash SG&A | 316 | 326 | 305 | 311 | 316 | Included $20M and $15M of aquisition expenses in Q1 and Q4 |
| Adjusted EBITDA | 710 | 715 | 716 | 709 | 705 | Down sequentially on acquisition costs. |
| Adjusted earnings per share | 0.35 | 0.41 | 0.40 | 0.70 | 0.34 | Analysts were looking for 0.37 |
| Network access margin % | 66.2% | 67.1% | 66.8% | 66.5% | 66.3% | |
| Adj. EBITDA margin % | 34.6% | 34.8% | 35.2% | 34.9% | 34.4% | |
| Capital Expenditures | 297 | 367 | 364 | 306 | 368 | |
| Free Cash Flow | 213 | 264 | 281 | 251 | 171 | Includes $2M in acquisition expesnes |
Some $20M was spent on costs associated with the CenturyLink deal, which held down total Adjusted EBITDA, although at $725 without them that number would have been the best we have seen. Last quarter they raised capex guidance, and the $368M spent during the quarter reflected those plans.
Last week we learned that Laurinda Pang will be joining Sunit Patel in the management structure of the combined company after the CenturyLink deal closes as executive vice president, global accounts management and international. She will be responsible for sales, revenue generation and enterprise service delivery for the company’s top global accounts and for the company’s APAC, EMEA and LATAM markets.
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Categories: Financials · Internet Backbones
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