Windstream Reports Smaller-Than-Expected Loss In Q3

Windstream reported a smaller-than-expected net loss of $7 million, or a loss of 8 cents per share, and total revenue of $1.5 billion in the third quarter of 2015.

That compares to net income of $8 million, or 7 cents per share, and total revenue of $1.46 billion during the same period in 2014. Consumer service revenue was up on a sequential basis with continued growth in high-speed Internet bundled revenue.

“The Windstream team is executing on all facets of our strategy and driving progress,” said Tony Thomas, Windstream’s president and CEO. “Total revenue grew sequentially, excluding the incremental CAF-2 revenues received. We continue to see steady results in our consumer and ILEC SMB units, and enterprise revenue growth accelerated.”

Last month, Windstream announced the sale of its data center business to TierPoint for $575 million in cash. The net proceeds from this transaction will enable about $300 million in debt reduction and fund Project Excel, a $250 million program that accelerates Windstream’s plans to upgrade and modernize its broadband capabilities by year-end 2016, or two years ahead of the previous timeline.

“These network upgrades will provide a great customer experience, drive higher customer revenue and allow us to increase market share,” Thomas said.

Enterprise service revenues totaled $501 million, up $15 million sequentially and 5 percent year-over-year, according to Windstream. Data and integrated service revenues grew 8.6 percent year-over-year.

Carrier service revenues were $169 million, benefitting from growth in new high-bandwidth WAVE sales and wireless Ethernet.

ILEC small business revenues were $107 million in the third quarter, remaining steady as growth in integrated voice and data services helped mitigate customer disconnects, according to Windstream.

CLEC small business service revenues were flat sequentially, at $146 million. According to Windstream this was “a meaningful improvement from recent trends, aided by increased focus on customer retention and higher average revenue per user.” In addition, Windstream said it is enhancing profitability with targeted cost reductions.

In August, Windstream announced it has accepted $175 million in Phase II Connect America Funds (CAF-2) to enable it to extend broadband services to nearly 400,000 rural households across 17 states. The FCC program will provide ongoing funding to support and expand rural broadband networks for carriers like Windstream, with the ability to provide at least 10/1 Mbps.

For fiscal 2015, Windstream expects total service revenues in the range of $5.578–$5.598 billion. It also projects capital expenditure in the band of $950–$975 million.

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