Windstream Q2 Profit Down 65%, But Backs 2014 Outlook

(RTTNews) - Telecommunications services provider Windstream Holdings Inc. (WIN) on Thursday reported a 65 percent decline in profit for the second quarter from last year, reflecting lower revenues and higher expenses. However, the company affirmed its revenue outlook for fiscal 2014.

The Little Rock, Arkansas-based company's net income for the second quarter was $14.0 million or $0.02 per share, down from $39.7 million or $0.06 per share in the prior-year quarter.

The latest quarter's results include after-tax merger and integration, restructuring and other expense of about $0.02 per share.

Excluding items, adjusted earnings per share for the latest quarter were $0.04. On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues and sales for the quarter declined 2 percent to $1.47 billion from $1.50 billion in the same quarter last year. Analysts' consensus revenue estimate for the quarter was $1.48 billion.

Service revenues for the quarter declined 2 percent from last year to $ 1.42 billion, while product sales declined 14 percent to $48.3 million.

Enterprise and small-business service revenue was $749 million, a slight increase sequentially and year-over-year. Carrier revenue declined 6 percent from last year to $155 million, pressured by wireless carriers decommissioning legacy circuits and other transport related network grooming.

Consumer broadband service revenue edged up 0.4 percent from last year to $121 million, while overall consumer service revenues decreased 2.8 percent to $317 million.

Wholesale revenues decreased 6 percent from the year-ago period to $141 million, primarily due to a decline in switched access revenue from lower intrastate access rates and fewer minutes of use.

Total costs and expenses for the quarter rose 2 percent from last year to $1.30 billion, while operating income declined 26 percent to $167.2 million.

Looking ahead to fiscal 2014, Windstream affirmed its previously provided financial guidance for 2014. The company still expects total revenues in a range of a 2.5 percent decline to a 1 percent increase as compared to 2013 revenue. Street is currently looking for full-year 2014 revenues of $5.89 billion.

WIN is trading at $11.31, down $0.24 or 2.12 percent on a volume of 3.15 million shares.