Level 3 CEO: Provisioning Problems Affected Earnings

Level 3 Communications Inc. reported a net loss of $174 million, or 11 cents per share, during the third quarter of 2007, a slight improvement over the second quarter’s $202 million net loss.

CEO James Crowe called the results disappointing.

“While we continued to grow core communications services revenues, and we did meet our guidance measures in the third quarter, the company had difficulties with provisioning orders for its services,” said Crowe. “The breadth of the problem was greater than we had earlier diagnosed.”

Provisioning problems come as no surprise to Level 3 channel partners. Ever since Level 3 went on a buying spree that included ICG and Broadwing, it has had trouble consolidating all of the companies’ back offices and products. Complaints over poor customer service and turnaround time mounted this fall, with several agents stating they won’t send more business to Level 3 until the kinks are ironed out.

Meanwhile, Level 3 is lowering its operating cash flow forecasts for 2007 and 2008. Shares were down 19 percent on the earnings news, trading for $3.49.

Level 3 Communications Inc. www.level3.com

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