FBR Capital Maintains a 'Market Perform' on Level 3 Communications (LVLT); Revenue and EBITDA Beat; Sharply Negative Free Cash Flow Remains a Major Concern

FBR Capital maintains a 'Market Perform' on Level 3 Communications (NASDAQ: LVLT), raises PT to $1.25.

FBR analyst says, "Although the proposed merger makes the medium-term survival of the combined entity more likely, we choose to wait until evidence that the integration is proceeding smoothly and the combined entity can successfully drive higher revenues and margins as well as positive free cash flow."

"Due to the continuance of an elevated level of capital spending, and signs of some degree of revenue stability, we are slightly raising our FY11 revenue estimate from $3.67B to $3.73B and increasing our adjusted EBITDA estimate from $872M to $938M. We are also introducing our LVLT-only FY12 estimates of $3.8B in revenues, $976M in EBITDA, and EPS of ($0.28)."

For more ratings news on Level 3 Communications click here and for the rating history of Level 3 Communications click here.

Shares of Level 3 Communications closed at $1.65 yesterday.

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