Level 3 profit beats estimates, raises EBITDA forecast
April 30 (Reuters) - Telecom network provider Level 3 Communications Inc raised its forecast for 2014 adjusted EBITDA growth and free cash flow after reporting a much better-than-expected quarterly profit.
Level 3 Communications shares rose 8 percent in premarket trading.
The company said it now expects adjusted earnings before interest, taxes, depreciation, and amortization to grow 14-18 percent, up from its previous forecast of an 11-14 percent growth due to higher revenue from its core network services.
Level 3 also raised its free cash flow forecast to $250 million-$300 million from $225 million-$275 million.
The company operates and leases out fiber-optic communications networks to telecom carriers for voice and data communication.
Its content delivery unit targets video distributors and online portals and competes with Akamai Technologies Inc and Limelight Networks Inc.
Level 3 reported its second quarterly profit on Wednesday, helped by a 6 percent rise in core network service revenue, after years of losses since 2009.
The company posted net profit of $112 million, or 47 cents per share, in the first quarter ended March 31, compared with a loss of $78 million, or 36 cents per share, a year earlier.
Revenue increased 2 percent to $1.61 billion.
Analysts on an average had expected earnings of 27 cents per share on revenue of $1.59 billion, according to Thomson Reuters I/B/E/S.
Level 3 undertook a cost-cutting program last year, which included job cuts.
The Federal Communications Commission is weighing rules that will allow content delivery companies to charge more from companies such as Netflix for faster Internet speeds, which could open up further revenue streams for companies like Level 3.
Level 3 shares were trading at $40.20 before markets opened on Wednesday. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das)