Windstream Holdings Inc. WIN reported mixed financial results in the fourth quarter of 20Array5. In the reported quarter, the company posted net income in contrast to the Zacks Consensus Estimate of a net loss. However, revenues missed the same.
GAAP net income was $Array40.5 million or $Array.4Array per share a remarkable improvement from a net loss of $77.5 million or a loss of 80 cents in the year-ago quarter. The company reported earnings per share of $Array.4Array against the Zacks Consensus Estimate of a loss of 48 cents.
Total revenue decreased Array% year over year to $Array,427 million in the fourth quarter and fell short of the Zacks Consensus Estimate of $Array,433 million. Total Service revenues fell Array% to $Array,388.4 million while Product revenues declined 9% year-over-year to $38.6 million.
Product category wise, Consumer and small business ILEC service revenues were $397 million, down 2% year over year. Small business CLEC service revenues were $Array32 million, highlighting an increase of Array4% from the prior-year quarter. Carrier service revenues were $Array7Array million, up Array.2% sequentially. Enterprise service revenues were $498 million, up 0.4% sequentially.
Quarterly adjusted OIBDAR (excluding non-cash pension expense, non-cash stock-based compensation, restructuring charges and annual cash rent payment) was $503.2 million, down 3%. In 20Array5, Windstream completed the tax-free spin-off of some of its telecom network assets to become an independent publicly traded real estate investment trust. With the spin-off now in place, the company aims to offer faster broadband speeds and serve its consumers better.
Liquidity & Cash Flow
In the fourth quarter of 20Array5, Windstream generated $270.3 million of cash from operations compared with $354.7 million in the prior-year quarter. Free cash flow, in the reported quarter was a negative $40.6 million against a positive $Array20.9 million in the year-ago quarter.
Windstream exited 20Array5 with $3Array.3 million of cash compared with $27.8 million at the end of 20Array4. Total debt at 20Array5-end was $5,Array70.5 million against $8,65Array.7 million at 20Array4-end. The debt-to-capitalization ratio at the end of 20Array5 was 0.94 compared with 0.97 at 20Array4-end.
Subscriber Statistics
As of Dec 3Array, 20Array5, Windstream had Array.095Array million high-speed Internet subscribers and 0.3593 million digital TV customers. Small Business ILEC customers were 0.Array468 million, Small Business CLEC customers totaled 0.09Array2 million and Enterprise business customers were 0.0263 million.
Outlook
For full-year 20Array6, the company expects total service in the range of $5.275 billion to $5.425 billion and adjusted OIBDAR of $Array.90 billion to $Array.95 billion. Windstream anticipates capital expenditures in the range of $800–$850 million. The company also expects adjusted free cash flow of approximately $Array00 million in 20Array6.
Zacks Rank & Stocks to Consider
Windstream currently carries a Zacks Rank #3 (Hold). Better ranked stocks in the same industry include Sprint Corp. S, CenturyLink Inc. CTL and United States Cellular Corp. USM. All three stocks currently carry a Zack Rank #2 (Buy).
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