Windstream Holdings Inc. on Thursday (April 3) reported improvement in revenue growth and customer additions in the first quarter of 2018, but still posted steep losses as the Little Rock-based rural broadband provider continues to transform its operations.
For the period ended March 31, Windstream posted a net loss of $121 million, or 65 cents per share, compared to a net loss of $111 million or a loss of 89 cents per share a year ago. Total revenues were $1.45 billion, up 6% from the same period a year ago, and total service revenues rose 7% year-over-year to $1.44 billion.
Windstream’s operating income was $69 million compared to $44 million in the same period a year ago, officials said. A survey of Wall Street analysts had expected the Arkansas telecom operator to report a first quarter loss of 62 cents per share on revenue of $1.47 billion, according to Thomson Reuters.
Windstream President and CEO Tony Thomas said the company’s strong year-over-year revenue growth in the first quarter “showed strong traction in (Windstream’s) ongoing transformation.”
“Customer demand for strategic services, including Unified Communications as a Service and SD-WAN, continued to grow and represented almost 40% of total enterprise sales during the quarter,” said Thomas. “Our recent network investments also have driven meaningful improvements in our broadband subscriber trends with March representing our best performance in more than five years.”
It has been more than a year since Windstream completed its $1.1 billion acquisition of former rival EarthLink Holdings Corp. of Atlanta. Windstream followed up that deal with the smaller purchase of upstate New York cloud solutions operator Broadview Networks Holdings Inc. in an all-cash deal worth $227.5 million.
A month ago, the Arkansas-based Fortune 500 telecom acquired New York City-based MASS Communications for nearly $37.5 million in an all-cash deal that will add nearly 40 new employees to the company’s payroll. Mass is a privately-held East Coast network management firm that serves a broad range of small to mid-sized global enterprises in the financial, legal, healthcare, technology, education and government sectors, company officials said.
The deal to acquire MASS is Windstream’s third acquisition in the past 13 months as the company seeks to profit from the growing demand for cloud-based services and high-speed network enterprise products. Windstream has struggled to regain its financial footing after the three acquisitions, announcing a string of quarterly losses after the company’s board of directors announced that the company was ending its dividend payout in favor of a new stock buyback program.
Still, the company has seen bright spots in its financial results with key growth in revenues, sales and operating income and a reduction in total cash costs.
“Total cash costs improved by more than 6% year-over-year, driven in part by our IT integration work, as well as our continued focus on reducing network interconnection expenses and driving improvements in our overall organizational effectiveness,” said Thomas.
Windstream re-affirmed its earlier guidance for yearly earnings and revenue. The company expects total service revenue of $5.275 billion to $5.425 billion and adjusted operating income of $1.9 billion to $1.95 billion. Adjusted capital spending is expected to be between $800 million and $850 million.
In early trading, Windstream’s stock (NASDAQ: WIN) was down nine cents, or 5.8% at $1.54 cents per share. The shares have traded in the range of $1.45 and $5.30 during the past 52 weeks.