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Level 3 CEO reassures investors

    Level 3 Communications (Nasdaq: LVLT) said Tuesday it is comfortable with previously raised estimates, and plans to revise its 2001 revenue projection.

    Shares in the Broadband services firm In October, Level 3 saw its third-quarter loss widen significantly from the year ago quarter, but managed to blast through expectations.

    In an open letter addressing "fellow stockholders," CEO James Q. Crowe reassured investors the company would meet estimates despite rocky times in the telecommunications industry.

    The company said it is still comfortable with communications revenue for this year of $825 million versus the previous projection of $750 million. This means that communications revenue for the fourth quarter is expected to be approximately $320 million, which is a growth rate of 25 percent quarter over quarter. Level 3 also plans to update its 2001 revenue projection, which stands at $1.7 billion after 2001 budget reviews.

    Crowe said the letter was in response to recent questions about Level 3 stock weakness. Investors are concerned that the company has increased its 2000 capital expenditures, and not increased its 2001 revenue projections.

    He said "we remain confident in our ability to earn a superior return on our invested capital. The reason we have not updated 2001 revenue projections is not concern over 2001 performance," but a commitment to providing accurate numbers, which can be better supplied after the company's budget reviews.

    Crowe clarified recent projections by saying that though the company has had capital expenditures of $4.5 billion in the third quarter, and it expects to spend $6.3 billion on capital goods through the end of 2000 -- both figures being an increase in the amounts expected at the beginning of the year -- the company is not projecting an increase in total investment required to achieve cash flow break even.