Despite narrowing its fourth-quarter loss and striking a partnership with Netflix (NASDAQ:NFLX), shares of Level 3 Communications (NASDAQ:LVLT) tumbled more than 7% Wednesday morning on lower revenues.
The Broomfield, Colo.-based company posted a loss of $52 million, or 3 cents a share, compared with a loss of $163 million, or 10 cents a share, in the same quarter last year, and ahead of average analyst estimates polled by Thomson Reuters of a 10-cent loss.
Revenue for the provider of network and Internet services in North America and Europe was $921 million, down slightly from $924 million a year ago, marginally beating the Street’s view of $920.07 million.
“We delivered strong fourth quarter results, building on our year-to-date momentum,” said Level 3 CEO James Crowe, who attributed the results to the company’s continued focus on customer services and business investments.
The company’s core network services segments was $720 million, up 2% compared with $706 million in the year-earlier period.
Level 3, which helps Netflix and Apple (NASDAQ:AAPL) stream music and video over the Internet, said it expects the core network unit to grow slightly in the first-quarter of 2011, however it anticipates a decline in consolidated earnings, due primarily to higher payroll taxes as well as higher costs of revenue from the expiration of certain term and volume discounts.