Level 3 Stock Hammered

Updated from 10 a.m. EDT

Level 3 (LVLT Quote - Cramer on LVLT - Stock Picks) sank 13% in heavy trading after the telco guided slightly below the Wall Street consensus for the rest of the year.

The Broomfield, Colo., company lost $202 million, or 13 cents a share, for the second quarter ended June 30, compared with the year-ago continuing operations loss of $224 million, or 25 cents a share. Communications revenue rose to $1.04 billion from $819 million a year earlier.

Analysts surveyed by Thomson Financial were looking for a 12-cent loss on sales of $1.05 billion.

"We are on track to deliver synergies from our acquisitions as expected, and we believe our competitive advantages and position in the marketplace are being recognized by our customers," said CEO James Crowe. "As a result, we saw strong sales momentum throughout the quarter, and demand for our services continues to grow across multiple market segments.

"While service activation challenges remain, we have a well developed plan to substantially improve these processes. We continue to expect significant growth in Core Communications Services revenue throughout 2007. Longer term, both market fundamentals and our competitive position continue to improve."

The company expects to post 2007 communications revenue of $4.03 billion to $4.31 billion, compared with a $4.24 billion Wall Street estimate.

Shares fell 75 cents to $4.97.