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Technology Stocks : (LVLT) - Level 3 Communications
LVLT 53.630.0%Nov 1 5:00 PM EST
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To: VIXandMore who wrote (1781)4/1/1999 1:20:00 PM
From: MangoBoy  Read Replies (1) of 3873
 
[Level 3 Reduces Charge For XCOM Merger, Boosting 1998 Earnings]

OMAHA, Neb. -(Dow Jones)- Level 3 Communications Inc. Thursday announced it would probably revise its 1998 earnings upward following an adjustment in charges taken related to the acquisition of XCOM Technologies Inc.

Level 3 (LVLT) said it had filed its 10-K form with the Securities and Exchange Commission, anticipating an adjustment to its charge for in-process research and development, affecting the second quarter of 1998, as part of its purchase of XCOM.

The telecommunications and information services company said the adjustment boosts 1998 earnings to 64 cents a share from the previously reported 40 cents a share.

Based on SEC guidance, Level 3 reduced the charge for in-process research and development to $30 million from $115 million and recorded an increase to goodwill of $85 million - to be amortized over five years.

The SEC has been cracking down on such charges in recent months, and several other companies similarly have restated results for previous quarters and years. The SEC says an increasing number of acquiring companies over the past few years have vaporized most of their acquisition deals' costs through a large initial charge. Thus, they have avoided repeated small earnings charges for goodwill (the premium paid over acquired net assets).

XCOM is a privately held company working on technology which Level 3 hopes to use in developing an interface between its Internet protocol-based network and the existing public telephone network.
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