Level 3's plans to replace CFO send stock for a dive

Jeff Smith, Rocky Mountain News

Published October 16, 2007 at midnight

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Level 3 shares plunged 11 percent in brisk trading Monday after the Broomfield fiber-optic company said it is looking for a new chief financial officer to replace Sunit Patel.

Patel, who joined the company in March 2003 and was named CFO two months later, is expected to remain with Level 3 until his successor is named.

Donna Jaegers, a telecommunications analyst with Janco Partners in Greenwood Village, gave Patel an "A-plus for keeping the company out of bankruptcy" a couple of years ago. But Jaegers said she thinks the announcement signals Level 3 is "probably having a tough time" and may have to cut its financial guidance when it announces third-quarter results next week.

Level 3 lost $202 million on revenues of $1.05 billion in its second quarter as business grew slowly and expenses increased because of recent acquisitions.

Jaegers noted Level 3 CEO James Crowe made a point of saying in a news release Monday that the company needs a CFO with operational as well as financial management skills.

"There's been so many acquisitions, and that's a tough task getting your hands around integrating seven different businesses," Jaegers said.

Level 3 spokesman Chris Hardman declined to comment beyond the news release. Shares fell 54 cents to $4.36 Monday.

Crowe praised Patel for helping lead a "spectacular" financial improvement, and described Patel as a "trusted colleague and close friend." The two also worked together at MFS Communications in the mid-1990s.

Patel co-founded Looking Glass Networks, one of the communications companies acquired by Level 3 in recent years.

Level 3

LVLT:Nasdaq

$4.36

- 54 cents

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