Windstream Reports Profit Gains For Q4, Full 2015

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Edward GatelyWindstream on Thursday reported $140.5 million in fourth-quarter profit, compared to a $77.5 million loss for the same quarter in 2014, surpassing Wall Street expectations.

The Little Rock, Arkansas-based business communications giant also reported $1.43 billion in revenue for the quarter, down only slightly from fourth-quarter 2014.

For the year, Windstream reported a profit of $27.4 million, compared to a $39.5 million loss in 2014. Revenue and sales totaled $5.76 billion, compared to $5.83 billion the prior year.

“Our year-end results reflect the strength and potential of our business and were in-line with our 2015 guidance,” said Tony Thomas, Windstream’s president and CEO. “During the year, we made significant progress on our strategic objectives. We remain focused on stabilizing and improving Windstream’s financial performance and advancing our network capabilities – all of which position the company for long-term success and shareholder value creation.”

Service revenues totaled $1.36 billion in the fourth quarter, essentially flat from the same period a year ago, and $5.47 billion for the year, also flat year-over-year, according to Windstream.{ad}

Consumer and small business ILEC service revenues totaled $397 million in the fourth quarter, a 2 percent drop from the year-ago quarter, and $1.6 billion for the year, a 1.5 percent decline.

Carrier service revenues were $171 million in the quarter, a $2 million increase from the third quarter, and $688 million for the year, a 6 percent drop.

Enterprise service revenues were $498 million in the fourth quarter, up slightly from the previous quarter, and $1.95 billion for the year, a 4 percent increase year-over-year.

Small business CLEC service revenues were $132 million in the fourth quarter, a 14 percent decrease from the same period a year ago, and $559 million for the year, a 15 percent decrease year-over-year.

“Looking ahead to 2016, we expect to continue building on the solid foundation established in 2015, and we are focused on pursuing multiple paths to create value for shareholders,” Thomas said. “We are executing a focused strategy to stabilize and grow operating cash flow. We also will continue to prudently …


… manage our balance sheet and take a balanced approach to capital allocation that includes reducing debt, making capital investments that create incremental cash flows and returning capital to shareholders.”

Windstream reduced its total debt by $3.5 billion in 2015 following the sale of its data-center business in December and the spinoff of CS&L in April. Following the spinoff of CS&L, Windstream retained an approximate 20 percent equity stake in CS&L, currently valued at approximately $504 million as of Feb. 24, 2016, which the company plans to monetize in the future and use the proceeds to further reduce debt.

Windstream earlier this month notified a percentage of its SMB customers with sub-$1,500 accounts that it is raising rates on deals that are costing it money. This is part of its increasing focus on its enterprise unit and enterprise partners.

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