Level 3 Profit, Revenue Rise

Level 3 Communications Inc. posted revenue and profit gains in its most recent quarter as the company's results were boosted by a multibillion-dollar tax benefit.

The Broomfield, Colo., telecommunications-services provider said its core network services revenue in North America grew 4.4% to $1.57 billion for the quarter. Its much smaller operations in the Europe, Middle East and Africa segment fell 4.1%, and the operations in Latin America decreased 6.4%.

The company also said it expects 2016 earnings before interest, taxes, depreciation and amortization to increase between 9% and 12%.

Level 3 reported a profit of $3.32 billion, or $9.24 on a per-share basis, up sharply from $66 million, or 21 cents a share, a year prior. Level 3 recorded an income tax benefit of $3.19 billion, which boosted its profit for the quarter.

Excluding the tax benefit and other charges, Level 3 posted earnings per share of 53 cents. Revenue increased 7.3% to $2.05 billion.

Analysts polled by Thomson Reuters expected per-share profit of 52 cents and revenue of $2.06 billion.

Companies such as Level 3 are taking advantage of rising demand for Internet bandwidth from several sectors, including media companies looking to distribute video over the Internet, big corporations that are increasingly reliant on computer services delivered over the Web and cellphone companies that are investing in links to get traffic off the airwaves and into fiber to speed service.

The soaring demand has spurred a consolidation spree among the carriers that own fiber-optic cables and data centers, the building blocks of the Web. Level 3 has used its acquisition of TW Telecom to pursue a wider range of business customers.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

February 04, 2016 10:15 ET (15:15 GMT)

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