Windstream Profits Decline, Will Explore Holding Company Formation
by August 8, 2013 6:39 am 92 views
Windstream Corp. posted lower earnings as revenues dipped and the company continued its repositioning strategy. It also disclosed that it is exploring a new holding company for its businesses.
The Little Rock-based telecommunications firm reported second quarter net income of $39.7 million, or 6 cents per diluted share, compared to $51 million, or 9 cents per diluted share, one year ago.
Revenues cleared $1.5 billion, down from $1.534 billion in last year’s second quarter.
Business service revenues and consumer broadband service revenues grew 2 percent and 6 percent respectively in a year-over-year comparison.
“Our strategy to reposition Windstream in growth areas is driving steady results,” said Jeff Gardner, president and CEO. “Additionally, we continue to strike a prudent balance among reinvesting in the company, paying an attractive dividend and reducing debt over time.”
Windstream updated its financial outlook for the remainder of the year. The company now expects total revenue to decline 1 percent to 3 percent compared to 2012 largely due to a modestly softer business sales environment and continuing pressure in the carrier transport business.
Also, Windstream announced it is exploring the formation of a holding company to become the new publicly traded parent company of Windstream and its subsidiaries.
“The modified ownership design would enhance Windstream’s corporate structure, strengthen its credit profile and provide greater financial flexibility. The revised corporate structure would mirror that of similar large companies,” the company said.
Windstream said it did not anticipate a change in its current dividend practice as a result of the formation of a holding company. The company said it will make a final decision regarding the proposed structure after all regulatory approvals are obtained and its analysis is completed.
The company’s stock closed trading Wednesday at $8.60 per share. In the past 12 months, Windstream’s stock has traded between $7.50 per share and $11.04 per share.
On Wednesday, Windstream announced that Bob Gunderman was promoted to treasurer.