Windstream Profit Falls, But Key Business Revenue Rises

By Craig Galbraith Comments
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Windstream said on Thursday that profit was down nearly 65 percent in the second quarter of 2014 when compared to a year ago, falling from $40 million in Q2 2013 to $14 million last quarter. But that doesn’t tell the whole story.

While overall revenue was down 2 percent year over year to approximately $1.5 billion, enterprise small-business service revenue was $749 million, a slight increase both sequentially and annually. Data and integrated services grew 3 percent in the second quarter from the same period a year ago, to $418 million. That was due primarily to sales of IP-based solutions and next-generation data.

Data center and managed services revenues, which total approximately $31 million, increased 20 percent from the same period a year ago – a major bright spot for the company.

Enterprise customer locations grew 3 percent from the same period a year ago, and average revenue per business customer increased 9 percent from Q2 2013.

"We are successfully executing on our key priorities this year to accelerate growth opportunities and strengthen our position as a leading provider of enterprise communications services," said Jeff Gardner, president and CEO of Windstream. “We have expanded our business marketing programs to strengthen sales and are seeing continued solid sales momentum and positive trends supporting our efforts to move up-market."

Thursday’s earnings news follows the company’s announcement last week that it is spinning off certain telco network assets into an independent, publicly traded real-estate investment trust (REIT). Windstream says the move will help it speed up network investment, provide enhanced services to customers and maximize shareholder value.

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