Reorganization Costs Affect Windstream Earnings
by August 9, 2012 9:01 am 127 views
Windstream Corp. posted higher revenues and lower profits from a year ago as the Little Rock-based telecom and broadband provider continued its metamorphosis from a traditional landline carrier.
Windstream reported second quarter net income of $54.2 million on revenues of $1.538 billion. One year ago, the company reported $96.7 million on revenues of $1.03 billion in the second quarter.
Nearly $30 million in quarterly costs were attributed to merger, integration and restructuring expenses. Windstream announced earlier this year that it would trim its management ranks by up to 400 workers, a move that could eventually save $40 million annually. The reorganization is
expected to be complete in the third quarter, the company said.
Windstream saw increases in revenue in its broadband and business channels — areas the company expects to grow as it rebalances its portfolio of offerings away from declining traditional landline telephone service. Windstream is not a cellular telephone company, but it has invested heavily in providing fiber optic services to the industry through cell tower infrastructure build-outs.
“Our teams once again delivered solid results in the key areas of business sales and consumer broadband during the second quarter,” said Jeff Gardner, president and CEO of Windstream. “We continue to make important investments in our network, particularly in fiber-to-the-tower projects, to further improve our financial profile.”
Gardner said the company is on track to achieve operating synergies of $50 million in 2012 and $100 million in total by the end of 2014 related to the Dec. 1, 2011 acquisition of New York-based PAETEC.
On August 8, Windstream’s board of directors declared regular quarterly dividends on the company’s common stock. The $0.25 quarterly dividend is payable Oct. 15, 2012, to stockholders of record as of Sept. 28, 2012.
Windstream’s stock closed trading Wednesday at $10.05 a share, but was trading lower in pre-market activity. The company’s stock has traded between $9.00 and $13.08 during the past year.