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Technology Stocks : (LVLT) - Level 3 Communications -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (3732)	8/3/2013 6:20:42 PM
From: David Klein	Read Replies (1) \| Respond to of 3873

Hi Ox, maybe they will spend more but the capex in the model is 12% of revenue which seems in line with the link in your post and confirmed by Sunit, if I read it correctly.

To: The Ox who wrote (3732)	9/11/2013 3:47:00 PM
From: Dwayne Hines	Respond to of 3873

B of A thinks it is worth $37.50 pps BoA << On track for EBITDA and FCF inflection Level 3 1Q13 results were below forecast on revenue, but incremental margin, which was a key investor concern at 4Q results recovered to 57% in 1Q13. Management maintained full year guidance for stronger sequential Core Network Services (CNS) revenue growth (compared to 2012), low double digit Adjusted EBITDA growth Y/Y and positive FCF. Commentary with regard to 1Q13 sales (+10% Y/Y) was constructive with regard to enterprise results and forecasts from AT&T and Verizon. CNS revenue light, EBITDA beat Core Network Services revenue of $1,372m was below our estimate of $1,386mn and decreased 1.3% Q/Q on a constant currency basis. Adjusted EBITDA of $386m beat consensus of $381m on stronger than projected margin. Enterprise CNS revenue grew 5.1% Y/Y and was flat sequentially due to expected pressure from UK government. Federal government spending was a drag as expected. Estimate revisions We have revised our estimates following 1Q13 results. Our 2013 revenue estimate falls from $6,509m to $6,365m on weaker than projected 1Q results and slower government spending. Our 2013E Adjusted EBITDA estimate decreases from $1,687m to $1,633m. We have also revised our 2013 FCF estimate from $121m to $82m. Reiterate Buy rating $37.50 price objective We reiterate our Buy rating and $37.50 price objective. We believe Level 3 represents the best risk/reward with the most company specific drivers in our alternative carrier coverage universe. Our $37.50 price objective is based on a weighted average of our Bear, Base and Bull case scenario analysis.>>