Windstream Reports $111 Million Loss, But Beats Street Expectations

Little Rock-based Windstream Holding Inc. reported substantial losses in the second quarter, but still was able to beat Wall Street expectations as the company’s shares were lifted in early morning trading on Thursday.

For the period ended June 30, 2015, the Little Rock telecom report a second quarter loss of $111 million, or $1.13 per share, compared to net income of $14 million, or 13 cents per share, a year ago. Total revenues for the quarter were essentially flat at $1.42 billion, compared to $1.47 billion a year ago.

Wall Street had expected Windstream to report a second quarter loss of 61 cents per share on revenues of $1.42 billion. Factoring out a one-time charge of after-tax expenses of $65 million, or 65 cents per share, the company lost 48 cents per share.

“We are on the right track strategically and financially. The new business unit structure has sharpened our focus and is driving operational excellence,” said Windstream President and CEO Tony Thomas. “The board and management team are confident in the future and remain focused on enhancing profitability and creating value for our shareholders.”

Companywide, Windstream’s consumer service revenues in the second quarter were $314 million, which grew $2 million relative to the first quarter, and were essentially unchanged from the same period a year ago.

“We again continue to see positive momentum in our consumer channel and we are making targeted investments to generate revenue growth in these attractive high margin businesses,” Thomas said.

ILEC small business revenues in the second quarter were $108 million as the company continues to invest in high-speed Internet capabilities to drive additional broadband revenue growth, officials said. Carrier service revenues were $156 million.

Enterprise service revenues were $485 million in the second quarter, up 3.5% from the same period a year ago, led by demand for IP-based solutions and next generation data. Data and integrated solution service revenues within Enterprise also grew approximately 7.3%. CLEC Small Business service revenues were $146 million in the second quarter.

Windstream also announced a share repurchase program of up to $75 million, which is expected to be completed by December 31, 2016. Management has been authorized to buy back shares opportunistically through open market purchases funded primarily by cash from operations.

“In order to create value for our shareholders, the board of directors has authorized a share repurchase program of up to $75 million,” Thomas said. “Windstream stock is significantly undervalued and a share buyback is an attractive investment and an efficient way to return capital to shareholders.”

In early trading on Thursday, Windstream shares were up 12 cents, or 2.37% at $5.18. Over the past year, the Little Rock-based Fortune 500 telecom has traded in the range of $4.42 and $18.14 per share.