Windstream Shares Get Boost From $450 Million VA Services Contract

News of a $450 million government service contract over the next five years pushed Windstream’s stock above five dollars in trading Tuesday ahead of the Little Rock telecom’s second quarter earnings report later this week.

Windstream officials announced Tuesday (Aug. 4) that it is one of three awardees of a contract to provide voice, data and Internet services for the federal government’s Department of Veterans Affairs Office of Information and Technology (OIT). Under the award, which has a ceiling of more than $450 million over the next five years, Windstream will provide voice, data and Internet services to 2,100 VA facilities across the nation.

“In the past, the VA’s local voice, data and internet services have been decentralized. By continuing its consolidation efforts and implementing more formalized management of its LEC services, the VA is able to strengthen all of its communications solutions, leveraging Windstream’s reliable, nationwide fiber network,” said Michael Magliato, vice president of government solutions at Windstream. “While this also supports the federal government’s overall budgetary and organizational goals, it allows the VA to offer higher quality service to our nation’s veterans — and Windstream is proud to be part of that effort.”

Windstream said the new contract is designed to reduce costs and support management at the VA, which has been riddled with project and costs overruns at its medical centers that have that have raised the ire of Congress and veterans’ support groups.

Windstream said it will install the telecom’s technology solutions at VA facilities nationwide, helping to bring greater efficiency and reliability to the agency’s communications solutions. The contract award also calls for Windstream to help the VA’s technology office manage its telecom and data services at varied locations across the U.S.

The Little Rock telecom and data services company will also provide multi-location VA medical center clinics and facilities with services such as local voice and high-speed Ethernet Internet services, as well as customized solutions to support complex telehealth initiatives. Rural VA clinics also will benefit from teleconferencing technology in order to communicate with hard-to-reach patients and medical practitioners, officials said.

“The strength and reliability of the Windstream network is foundational to the essential communication needs of federal government offices and its employees,” said David Works, president of enterprise at Windstream. “As a U.S Navy veteran, I’m personally committed to ensuring that we provide our government with the reliable and secure technology solutions that will assist in the efficient delivery of healthcare to veterans across the nation.”

Recently, the VA’s Office of Information and Technology launched a new website containing identity theft resources for veterans and their beneficiaries. In a blog post last week, VA Secretary Bob McDonald said the agency is “undergoing a radical transformation to improve our relationship with our veterans.”

The government contract gave a much needed boost to Windstream’s stock, which has struggled to move off its 52-week low of $4.42 touched just a week ago. At the close of business Tuesday, Windstream shares were up 14 cents or 2.85% at $5.06 as nearly 5.3 million shares traded hands.

Windstream is expected to release its second quarter financial statements on Thursday, ahead of the opening bell. Wall Street expects the former Alltel spinoff to report a second quarter loss of 61 cents per share on revenues of $1.42 billion, according to Thomson Reuters. A year ago, Windstream posted a second quarter profit of 24 cents per share.