Windstream Reports Revenue Jump, Flat-line Profits In 2012

by Roby Brock ([email protected]) 19 views 

Windstream Corporation’s fourth quarter pushed its full-year results to a 44% increase in revenues and flat-line profits as the telecom and data provider continued tweaking its product and service mix. Perhaps more importantly, the company’s management underscored a commitment to maintaining a solid dividend payout.

Little Rock-based Windstream reported 2012 fourth quarter net income of $10.1 million on revenue of $1.54 billion. One year ago, the company posted fourth quarter net income of $44.8 million on revenue of $1.21 billion.

For the full fiscal year, Windstream’s revenue climbed 44% to $6.16 billion, up from $4.28 billion in 2011. Net income was relatively flat in 2012 at $168 million compared to $169.5 million a year ago.

The company noted that total business and consumer broadband revenues now represent 70% of the company’s total revenues.

“We made significant progress on key initiatives in 2012 that will further strengthen our business going forward. I am particularly proud of our team’s accomplishments in navigating the multi-year impact of regulatory reform and evolving consumer preferences while maintaining solid operating cash flow,” said Windstream CEO Jeff Gardner.

“We plan to make targeted investments in the business channel this year to drive sales, profitability and improve the customer experience,” he added. “We expect to substantially complete our capital investments related to our fiber-to-the-tower projects and broadband stimulus initiatives. We also expect to further improve our balance sheet by directing excess free cash flow – after our dividend – to debt repayment.”

Windstream has long been considered a solid dividend stock investment and Gardner re-emphasized the firm’s commitment to maintaining that reputation. Last week one of its chief competitors, CenturyLink, announced it would slash its dividend payout by roughly 22% amid industry headwinds.

Gardner went out of his way in Tuesday’s earnings release to underscore his board’s commitment to maintaining its high dividend payout.

“Windstream continues to produce substantial free cash flow that enables us to invest in our business and reduce our debt while continuing to pay our $1 annual dividend,” said Gardner. “Our management team and the board of directors unanimously support continuing the dividend at its current rate because we believe it is the best way to create value for our shareholders.”

Windstream Corp. stock (NASDAQ:WIN) closed trading on Monday at $8.93 per share. The company’s stock has traded between and $7.86 and $12.55 per share during the past year.

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