BROOMFIELD, Colo. (AP) — Level 3 Communications Inc.'s stock sank nearly 10 percent Wednesday, after the Internet services company reported a bigger second-quarter loss than analysts anticipated.
The trouble was concentrated in the United Kingdom, where sales for Level 3's services for delivering content over the Internet tapered off as Europe's economy weakened during the spring.
Despite the setback in the three-month period ending in June, Level 3's management predicted revenue growth would pick up enough during the final half of the year to enable the company to realize the revenue goals established at the beginning of the year.
The pledge didn't convince many investors caught off-guard by the size of the second-quarter loss at a time Level 3 is still trying to digest a $2 billion acquisition of long-distance telecommunications provider Global Crossing. That deal wasn't completed until last October, preventing apples-to-apples comparisons between this year's second quarter and the same time last year.
The company's shares dropped $1.98 to close at $18.44.
Level 3 lost $62 million, or 29 cents per share, in the latest quarter. That was about a third of the $181 million loss, or $1.59 per share, a year ago.
Analysts, on average, had predicted a loss of 26 cents per share, according to FactSet.
Revenue for the period totaled $1.59 billion. That represented a 74 percent increase from revenue of $913 million in last year's second quarter, when Level 3 didn't own Global Crossing. The revenue for the most recent quarter was nearly $20 million below analyst projections.
Until it has been running Global Crossing longer, Level 3 is comparing its quarterly results on a sequential basis. This year's second-quarter revenue mirrored the company's performance during the opening three months of the year.