NEW YORK (Reuters) - Level 3 Communications Inc’s quarterly sales fell showing the Internet infrastructure and services company struggling to grow despite a high-profile partnership with Netflix Inc.
Level 3 also forecast negative free cash flow for 2011, and the shares fell 5 percent in premarket trade.
The company, which operates Internet backbone networks and helps Netflix and Apple Inc deliver music and video over the Internet, said fourth-quarter sales fell to $921 million (569 million pounds) from $924 million a year earlier.
That was mostly in line with analysts’ estimates, according to Thomson Reuters I/B/E/S.
Its quarterly net loss shrank to $52 million, or 3 cents per share, from $182 million, or 11 cents a share, a year earlier.
That was better than Wall Street’s average forecast for a loss of 10 cents per share, but the company’s calculation included an income tax benefit of 6 cents per share.
The shares fell 7 cents to $1.22 in premarket trade.
While overall Internet traffic has grown, Level 3 is facing increased competition from other content delivery network (CDN) rivals like Akamai Technologies Inc.
Clients like Netflix have been trying to negotiate lower CDN prices to rein in costs of delivering bandwidth-heavy video streams.
Level 3 is also fighting with top U.S. cable provider Comcast Corp, which is demanding a fee from Level 3 to carry videos and other bandwidth-heavy Web traffic.
Reporting by Ritsuko Ando, editing by Gerald E. McCormick and Derek Caney