Windstream Reports $129 Million Q3 Loss, Readies Uniti Court Battle

Profit and Loss

Windstream, which filed chapter 11 bankruptcy in February, reported a $129 million loss, and $1.27 billion in revenue and sales for the third quarter compared to the same quarter in 2018.

Revenue and sales were down from $1.38 billion for the year-ago quarter. Also, the company reported a $41.3 million profit for that quarter.

Windstream grew its Kinetic broadband customer base for the sixth consecutive quarter, adding 5,700 new subscribers during the third quarter. The company has added about 19,000 new broadband subscribers year to date, a 126% increase year-over-year.

Enterprise strategic sales also continued to increase, representing about 65% of total enterprise sales during the third quarter. Sales of strategic products and services, including SD-WAN, UCaaS and OfficeSuite UC, now represent an annualized run-rate of $290 million in revenue and are growing about 41% year over year.

Overall service revenues, however, were down. Kinetic service revenue was $506 million compared to $525 million for the year-ago quarter. Enterprise service revenue was $650 million compared to $737 million for the year-ago quarter.

Windstream's Tony Thomas

Windstream’s Tony Thomas

And wholesale service revenue was $86 million, compared to $96 million in the same period a year ago.

Windstream continues to execute on our operational priorities and remains focused on taking care of our customers during the restructuring process,” said Tony Thomas, Windstream’s president and CEO. “In the third quarter, we once again delivered broadband customer growth in our Kinetic business unit and grew sales of our enterprise strategic products. I am proud of the continued focus of our team and appreciate the support of all of our stakeholders as we work through the restructuring process.”

During the third-quarter earnings presentation, Thomas said Windstream continues to work to modify its arrangement with Uniti, a publicly traded real estate investment trust (REIT) consisting of network assets that Windstream divested in 2015. Windstream pays Uniti about $650 million annually to use Uniti’s network.

“As discussed on last quarter’s call, to increase the likelihood of an optimal result, Windstream is pursuing both litigation against and negotiations with Uniti,” Thomas said. “We are hopeful this process will lead to a mutually satisfactory agreement between Windstream, Uniti and our other key stakeholders. Absent an acceptable negotiated resolution, Windstream is prepared to pursue its litigation claims to conclusion. The trial is currently scheduled to begin in the first week of March.”

Windstream hasn’t yet indicated when it expects to emerge from chapter 11, but said it “remains focused on securing a result that maximizes value for all of the company’s stakeholders.”

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