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Level 3 Misses on Sales

Shares sink 8%.

Updated from 7:33 a.m.

Level 3


dropped 8% early Tuesday after missing third-quarter sales targets, citing a sharp decline in its SBC contract revenue.

The Broomfield, Colo., telco lost $163 million, or 14 cents a share, from continuing operations for the quarter ended Sept. 30. That compares with a year-ago loss of $207 million, or 29 cents a share. Revenue rose to $875 million from $384 million a year earlier.

Analysts surveyed by Thomson Financial were looking for a 14-cent loss on sales of $905 million.

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The news comes just a week after the company's shares soared after it rolled out a $1.4 billion acquisition of




"The continued strength in our core communications business and our strengthening gross margin are indicators of strong momentum," said CEO James Crowe. "We are confident in our ability to continue to deliver industry leading growth in our core communications revenues."

The company guided to core communication revenue of $785 million to $830 million for the fourth quarter. Analysts were looking for total revenue of $869 million.

Shares fell 49 cents early Tuesday to $5.37.