Dawson James Securities: Level 3 Movin' On Up as Losses Narrow

In a research report published today by Dawson James Securities, Level 3 Communications Inc. LVLT reported sales of $1.579 billion for Q4/11, an increase of 71.4% from sales of $921 million in Q4/10. Dawson James Securities commented in the report, “The bulk of revenue growth can be attributed to the acquisition of Global Crossing (closed in October 2011), as well as organic growth in core network services, offset by declines in the legacy wholesale voice segment and the sale of the coal mining business. Gross margins declined from 60.4% in Q4/10 to 58.2% in Q4/11 as a result of the acquisition of Global Crossing's lower margin business, partially offset by Level 3's organic margin expansion from 60.4% to 63.4% over the same time period. The Company's net loss narrowed from $207 million in Q3/11, or ($1.75) per share, to $163 million in Q4/11, or ($0.80) per share.” Dawson James Securities maintains its Buy rating and $45 PT on Level 3, which is currently trading at $23.52.