Windstreams Profit Drops 74%, But Business Services Provide Bright Spot

Windstream’s net income dropped 74 percent in the third quarter, from $30.6 million a year ago to $8 million, as the Arkansas-based service provider faced higher expenses, including merger and integration costs.

Earnings per share went from 5 cents in 2013’s third quarter to 1 cent. Most analysts were expecting 3 or 4 cents per share. Revenue, meanwhile, declined to $1.46 billion from $1.50 billion.

As with other telecom providers reporting earnings this week, the brightest spot seemed to be growth in demand from businesses. Enterprise and SMB revenue came to $752 million, which Windstream called a slight sequential and year-over-year increase. Data center and managed services revenue rose 21 percent, to $32 million, compared to the year-earlier period. Plus, enterprise customer locations grew 3.6 percent and business customer ARPU rose 10 percent year-over-year, Windstream said.

“We continued to see positive trends during the quarter supporting our efforts to move up-market, evidenced by our acceleration in enterprise customer growth and average revenue per customer,” Windstream CEO Jeff Gardner said in a press release.

Overall, for the full year, Windstream expects total revenue either to fall 2.5 percent or rise 1 percent over 2013’s figures.

The news comes as Windstream keeps working toward a spinoff of its copper and fiber network assets into a separate, publicly traded company, and as the provider integrates its Business Only Broadband purchase.


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