Windstream posts adjusted loss of $2.57 per share, adds 8,400 new customers

Shares of Windstream Holdings Inc. jumped nearly 10% in early trading Thursday (Nov. 8) after the Little Rock broadband provider’s third quarter earnings came in ahead of Wall Street expectations despite a continuing string of unprofitable results.

For the period ended September, the Little Rock telecom reported third-quarter net income of $41.3 million, or 97 cents per share, compared to a net loss of $102 million, or a loss of $2.76 per share, in the same period a year ago. Adjusting for extinguished debt, Windstream reported a net loss of $2.57 per share.

Third quarter revenues for the Little Rock broadband and communications operator was $1.42 billion, down 5% compared to the third quarter of 2017. Wall Street had forecasted the company to report third quarter losses of $2.60 per share on revenue of $1.43 billion, according to Thomson Reuters.

Windstream President and CEO Tony Thomas noted the addition of 8,400 broadband subscribers in the third quarter as the former landline subsidiary of the now defunct Alltel Corp. seeks to return to profitability.

“Windstream added 8,400 broadband customers in the third quarter, our strongest residential subscriber growth in years,” said Thomas. “This growth is clear evidence that customers are responding as we deploy faster broadband speeds across our very rural footprint, and we will continue to build on that success. We expect to double the availability of 100 Mbps internet service to 30% of the households in our markets by the end of March 2019.

“These results, combined with ongoing reductions in network interconnection expenses and optimization of other costs, helped deliver year-over-year growth in adjusting (earnings) for the third consecutive quarter, as well as improved free cash flow trends. Windstream is on a clear path going forward to improve revenue trends, drive Adjusted OIBDAR growth and create value for all our stakeholders.”

Companywide, sales in Windstream’s legacy phone service and small business group totaled $459 million, a decrease of 5% from the same period a year ago. Segment income for the company’s ILEC, or incumbent local exchange carrier business, fell 4% to $266 million, compared to $270 million year-over-year.

In the company’s Enterprise business, service revenues declined 5% to $717 million from a year ago. Segment income, however, jumped 13.8% to $161 million, a strong year-over-year improvement from $147 million in the same period of 2017.

Wholesale service revenues and income declined to $182 million, down 5% from a year ago. Segment income was down 6.7% to $127 million compared to $147 million a year ago. Windstream’s CLEC consumer services revenues were $44 million, a decrease of 16% from the same period a year ago. Segment income was essentially unchanged at $24.9 million year-over-year.

After a strong start out of the gate in Thursday’s session, Windstream shares (NASDAQ: WIN) were trading up 35 cents at $4.91 ahead of the midday. Company shares have traded in the range of $.03 as a low and $13.65 as a high.