BROOMFIELD, Colo. (AP) – Level 3 Communications Inc. said Tuesday it posted a narrower first-quarter loss, as cost cuts helped offset the effects of lower revenue.

But investors weren't pleased and Level 3 shares dropped 6 cents, or 5.3 percent, to $1.07 in morning trading.

Level 3 posted a loss of $132 million, or 8 cents per share, compared with a loss of $190 million, or 12 cents per share, in the year-ago period. Sales dropped 10 percent to $980 million from $1.09 billion.

Analysts polled by Thomson Reuters expected a loss of 8 cents per share on $1.03 billion in revenue.

The company's total cost of revenue dropped 5 percent to $407 million, while total costs and expenses were relatively flat at $968 million.

Level 3 said that while it remains cautious, it's beginning to see signs of stabilization in its core communications services revenue base. The company said it expects its sales to remain pressured in the second quarter, but not as much as before.

Level 3 said it plans to keep cutting costs and eliminate 150 jobs during the second quarter, resulting in a $6 million to $7 million severance charge.

Level 3 announced recently that it has become a reseller of IPtimize, a broadband voice and data service provider (story here). The combination of the former’s network and the latter’s equipment and services constitutes an alternative for local cable operators looking to connect to nationwide networks, potentially at a much lower cost than otherwise.