Windstream Q4 Adj Profit Meets View, Guides 2014 Revenue In Line

(RTTNews) - Telecommunications services provider Windstream Corp. (WIN) reported Thursday a profit for the fourth quarter soared from last year, despite a revenue decline, reflecting lower costs and expenses as well as a pension plan related benefit.

Adjusted earnings per share matched analysts' expectations, while quarterly revenues missed their estimates. The company also provided revenue guidance for the full-year 2014, in line with Street view.

The Little Rock, Arkansas-based company reported net income of $118.4 million, or $0.20 per share for the fourth quarter, sharply higher than $10.1 million, or $0.02 per share in the prior-year quarter.

Results for the latest quarter include a non-cash benefit of $0.13 per share related to pension plan, and a near $0.02 per share after-tax merger and integration, restructuring and other expense. Excluding these items, adjusted earnings per share would have been $0.09.

On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues and sales for the quarter declined 3 percent to $1.49 billion from $1.53 billion in the same quarter last year, and missed ten Wall Street analysts' consensus estimate of $1.50 billion.

Service revenues declined 3 percent to $ 1.44 billion from last year, with business service revenues declining $3 million to $920 million, while consumer broadband revenue grew 3 percent to $119 million from a year ago. Overall consumer service revenues declined 5 percent to $318 million from last year.

Wholesale revenues in the fourth quarter decreased 15 percent to $143 million from a year ago, primarily due to a decline in switched access revenue from lower intrastate access rates and fewer minutes of use.

Operating income for the quarter nearly doubled to $326.5 million, as total costs and expenses declined 15 percent to $1.16 billion from last year.

"2013 was a solid year for Windstream. Our business team finished the year strong, generating sequential revenue growth again, and our consumer team continued to grow broadband revenue and deliver steady results, all of which better position us to achieve our goals and deliver value to shareholders," President and CEO Jeff Gardner said in a statement.

For fiscal 2013, the company reported net income of $241.0 million or $0.40 per share, higher than $168.0 million, or $0.28 per share in the prior year. Total revenues and sales for the full year declined 2 percent to $5.99 billion from $6.14 billion in the previous year. Windstream grew strategic revenue 2 percent to $4.3 billion.

Analysts expected the company to report full-year 2013 earnings of $0.34 per share on annual revenues of $6.01 billion.

Looking ahead to fiscal 2014, Windstream expects continued growth in business revenue and improved trends in consumer and wholesale revenues. It expects revenues within a range of a 2.5 percent decline to a 1 percent increase from 2013 revenues of $5.99 billion, implying revenues between $5.84 billion and $6.05 billion. Street is currently looking for full-year 2014 revenues of $5.94 billion.

"We are executing a growth-oriented strategy while also managing our legacy business for profitability. This combination is gradually stabilizing top-line trends and generating substantial cash flow. It is our continued belief that our capital allocation strategy strikes the right balance among investing in the growth drivers of the business, paying an attractive dividend to our shareholders and reducing debt over time," Gardner added.

WIN closed Wednesday's regular trading session at $7.93, down $0.05 on a volume of 11.82 million shares.