Level 3 Communications lost money in 22 consecutive quarters - to the tune of $4.15 billion in total.

On Wednesday, the Broomfield-based communications carrier recorded its first quarterly profit since 2003.

But that kept investors happy for only a couple of hours.

The $44 million profit - read the fine print - came from one- time gains and deep spending cuts, including the elimination of 450 jobs.

The profit milestone was soon forgotten because of a decline in revenues from $1.1 billion to $1.05 billion. The fact that Level 3 missed revenue projections clearly worried investors.

Level 3 shares rose 20 cents to $1.20 in early trading then plummeted, finishing at 85 cents, down 15 percent.

"The fact they're cutting expenses so dramatically says they're battening down the hatches and trying to survive," said Donna Jaegers, a telecommunications analyst at D.A. Davidson & Co. in Denver.

Level 3 said it has cut its work force more than 20 percent from 6,690 at year-end 2007 to 5,275.

"The bad part is," Jaegers said, "where's the (revenue) growth? The company is supposed to be a play on the growth of the Internet, yet pricing is down so sharply on the big (broadband) pipes that even though volumes are growing, they can't show revenue growth."

Level 3 carries traffic for such Internet companies as YouTube and MySpace.

Company Vice Chairman Charles C. "Buddy" Miller III emphasized in an interview that Level 3 has turned a corner in recording positive free cash flow of $124 million for the quarter.

He noted the company also reaffirmed its guidance that it will be cash-flow positive for 2009.

Free cash flow is typically considered to be a company's cash flow from operations, minus amounts it pays for capital expenditures.

Level 3 had a negative cash flow of $402 million in 2007, and a negative cash flow of $36 million in full-year 2008.

As for the lack of revenue growth, "the general economy is hurting everyone now," Miller said, adding that Level 3 also is experiencing a high churn of customers who came with acquisitions but aren't part of Level 3's target group.

Level 3 still has more than $6 billion in long-term debt, but it did recently refinance a large chunk of its debt due in 2009 and 2010.

While that was quite an achievement in this economic environment, Level 3 had to turn to some of its loyal stockholders for the money, and is paying a 15 percent annual interest rate for debt that eventually could be converted by the investors into stock at $1.80 a share. That would further dilute the stakes held by current shareholders.

Sunit Patel, Level 3 chief financial officer, said the refinancing will enable the company to repay its remaining 2009 and 2010 debt maturities with cash on hand.

Level 3 ended the fourth quarter with $768 million in cash.

Level 3's debt was a concern of some customers before the company refinanced.

Some, in fact, asked to speak to Patel about the company's finances, Miller said.

But Miller said he wasn't aware that any of those discussions directly caused potential customers not to buy services from Level 3.

Additional reporting by finance editor David Milstead.