StockCall Study on Level 3 Co. and Crown Castle: Industry Goes through Challenging Phase

Feb 19, 2013, 08:00 ET from

LONDON, February 19, 2013 /PRNewswire/ --

Ancillary communication companies have their fortunes tied to the overall trend in the telecommunication sector. However, apart from the macro environment factors, companies are also affected by the internal efficiencies. Level 3 Communications Inc. (NYSE: LVLT) is going through rough times as it reported lower-than-expected results. Its outlook for the coming year is also quite dim. On the other, Crown Castle International Corp. (NYSE: CCI) reported double-digit increase in its revenue and revised its outlook upward. The company is also planning to change its organizational structure. StockCall free coverage on Level 3 Communications Inc. and Crown Castle International Corp. is available upon registration at

Crown Castle Raised Outlook

Crown Castle International reported 30 percent increase in its revenue for the fourth quarter of the year. However, its EPS suffered a major decline as it stood at -$0.07 for Q4, down from 16 cents per share reported in the corresponding quarter of the last year. At the very same time, its margins held up, providing some relief. The result announcement took its toll on the share price. Though, the stock had created a new 52-week high price right before earnings announcement. Register now and get access to the free analysis on Crown Castle International Corp. at  

On the positive side, the company raised its outlook and expects its first quarter site rental revenue to be in the range of $605 million to $610 million. Its full year site rental revenue is likely to range between $2.444 billion and $2.459 billion.

Crown Castle is also reinventing itself. The company deals in tower management for wireless companies. However, the latest trend among the tower management companies is to start operating as REITs. Many prominent tower companies including American Tower took the leap. While Crown Castle maintained the slow pace of conversion, it seems like that the company would transform itself into a REIT in the not so far future. With the increase in cellular traffic, well managed tower company stocks are bound to perform well.

Level 3 Provides Soft Outlook

Level 3 Communications posted higher loss for its fourth quarter. Its per share loss stood at 26 cents per share, a higher-than-expected loss of 7 cents per share. Its revenue for the quarter was posted at $1.61 billion. The company management stressed the fact that the company boosted its balance sheet. However, it is still saddled with high amount of debts. Download the free technical research on Level 3 Communications Inc. by signing up at  

For its fiscal first quarter, the company is expected to report its revenue at $1.61 while its EPS is expected to stand at -$0.02. For the entire year, Level 3 is projected to earn 41 cents per share in net income on the revenue of $6.57 billion. Its stock is down 10 percent so far this year. Investment firm Thornburg Asset Management also reduced its stake in the company. While, given the disappointing results and conservative outlook, the upside to the stock is limited, it is expected to recoup its losses.

Level 3 Communications is taking steps to realign its business and boost profitability. The company recently introduced its new channel partner program which will help the company to augment its business.

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