Level 3 chief apologizes, says turnabout due in '09
'07 problems solved, company will seek more acquisitions
By Kimberly S. Johnson
The Denver Post
Article Last Updated: 05/21/2008 02:57:32 AM MDT
Level 3 Communications chief executive James Crowe apologized Tuesday for the company's poor performance integrating the nine businesses it has acquired in the past two years.
The long-haul fiber-network company hasn't turned a profit in nine years, and its stock has been mired in the $2-to-$3 range this year. Shares closed Tuesday at $3.38, down 10 cents.
"We know we've disappointed a lot of you," Crowe said during the annual shareholders meeting. "We screwed up, and I'm sure it's not the last time we will."
But he said the company would be cash-flow-positive by early 2009 and will look for additional acquisitions. He urged investors in the Broomfield-based firm to view Level 3 as an intermediate- to long-term investment.
"Given all the consolidation (in the industry), the future belongs to those that have end-to-end networks," Crowe said.
He added that there were three kinds of businesses that would be good strategic targets: long-distance-service companies; companies that have fiber networks in metropolitan areas; and technology companies that enable content distribution over the Internet.
"We want to be the FedEx or UPS of our business," Crowe said. "We're the low-cost provider of a technical commodity."
He said the company has fixed most, if not all, of the operation and provisioning problems that plagued it last year.
"Our 2008 goal is to generate sustainable, positive, free cash flow as soon as reasonably possible," he said. "We're going to increase our sales and installation rates to match an already demonstrated demand for our services."
The official meeting lasted about 15 minutes, then Crowe and chief financial officer Sunit Patel talked about the company's direction and answered questions.
One shareholder said Level 3's problems haven't soured him on the company.
"The major problems they had ... are being solved," said Morton Dick, an investor from New York who has held Level 3 shares for eight years.
Kimberly S. Johnson: 303-954-1088 or kjohnson@denverpost.com
origin.denverpost.com |
