Windstream Holdings Inc. (WIN) is a leading rural local exchange carrier in the U.S. The company offers broadband, telephony and digital TV services to consumers primarily in rural areas. Windstream also provides advanced network communications such as cloud computing and managed services to business enterprises.
Windstream provided a weak outlook for fiscal 2014. Decommissioning of legacy circuits by wireless carriers, decline in switched access revenues, lower intrastate access rates, fewer usage minutes and other transport-related network grooming are affecting the company’s financial performances. Threats from a competitive market, soft carrier transport business situation, and a highly leveraged balance sheet may weigh upon this quarter’s performance.
Nevertheless, in Nov 2014, Windstream streamlined costs through job retrenchment activities, cutting 350 job positions across several of its departments, in order to bolster its bottom line. In Dec 2014, the company was rewarded with a five-year multimillion-dollar contract by the National Weather Service. We believe the contract win will drive the company’s top line higher.
Windstream currently carries a Zacks Rank #3 (Hold). The company has generated a massive negative average earnings surprise of 35.77% in the previous four quarters. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: Windstream meets Q4 earnings. Our consensus earnings estimate called for an adjusted EPS of 3 cents and the company reported adjusted EPS was exactly the same. Investors should note that these figures take out stock option expenses.
Revenue: Windstream reported total revenue of $1,443.1 million fell below our estimate by around $13 million.
Key States to Note: In the reported quarter, Windstream lost 259,000 voice lines and 10,400 high-speed Internet customers. At the end of 2014, the company had 1.6146 million voice lines, 1.1316 million high-speed Internet customers and 0.3853 million digital TV customers.
Stock Price: At the time of writing, the stock price of Windstream was down nearly 0.82% (7 cents) in the per-market trade on Nasdaq. Clearly the initial reaction to the release is negative. We believe massive loss of voice lines and high-speed Internet customers are near-term concerns for the investors.
Check back later for our full write up on this Windstream earnings report later!
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