Level 3 Communications is a company that needs to beat and guide higher rather than "meet and reaffirm." This morning Level 3 is trading down about 3% in initial pre-market activity after posting -$0.15 EPS on revenues of $1.06 Billion versus -$0.22 EPS and $1.04 Billion revenue estimates. After refinancings, the company posted -$0.44 EPS on a net-net basis. The revenue guidance for the coming quarter was $1.0 to $1.045 Billion versus $1.05 Billlion estimates. It also projected $4.03 to $4.31 Billion in revenues for the coming quarter versus $4.24 Billion estimates.
This stock has too close of a "core growth investor" following to just guide in-line, particularly if Jim Cramer is going to name it his #1 Speculative Stock for 2007 (on Jan 5, 2007). The day he named the stock to this position it had risen to $5.93 before he made the call and $6.20 right after, if you include the almost 3% drop pre-market you have a stock that is back in the middle of those two prices. Shares closed at $6.18 yesterday and are around $6.00 pre-market; the 52-week trading range is $3.37 to $6.80.
This may be good enough for established companies, but this is mediocre and not good enough for the profile of Level 3.
Jon C. Ogg
April 26, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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