Back to top

Analyst Blog

Zacks Equity Research

Windstream Lags on Q3 Earnings, Revs

WIN CTL FTR

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Windstream Holdings Inc. (WIN - Analyst Report) reported weak third-quarter 2013 results due to voice and digital television subscriber loss and reduced intrastate access rates. These were partially offset by strong data and integrated service revenues.

Quarterly adjusted earnings per share of 8 cents fell short of the Zacks Consensus Estimate of 9 cents. Comparing with the prior-year quarter, earnings remained the same.

Pro forma revenues decreased 2.7% year over year to $1,503.6 million in the third quarter and was below the Zacks Consensus Estimate of $1,507.0 million. Total Service revenues and Product sales fell 2.6% and 6.4% year over year, respectively.

Adjusted OIBDA (excluding non-cash pension expense, non-cash stock-based compensation and restructuring charges) was $574.7 million in the third quarter compared with $592.0 million in the year-ago quarter.

Subscriber Statistics

During the third quarter, total access lines, which include voice lines, high-speed Internet and digital television customers, decreased 4.8% year over year to $3.35 million. Voice lines and digital television customers witnessed a year-over-year decline of 6.0% and 5.0%, respectively, while high-speed Internet fell a 3.0%.

Liquidity

Windstream exited the third quarter with cash and cash equivalents of $73.4 million compared with $132.0 million at the end of 2012. Long-term debt and capital lease obligations were $8,760.8 million compared with $8,099.8 million at the end of 2012.

For the third quarter, the company generated adjusted free cash flow of $264.0 million and capital expenditure was $187.4 million.

Our Analysis

We believe that a competitive market scenario, continuous access line loss, regulatory issues and constant upgrades in the technological scenario will impede the company’s growth.

Other Stocks

Other telecom companies like Frontier Communications (FTR - Analyst Report) and Century Link Inc. (CTL - Analyst Report) reported third-quarter results on Nov 5 and Nov 6, respectively. Frontier and CenturyLink reported in-line earnings of 6 and 63 cents respectively.

Windstream currently carries a Zacks Rank #4 (Sell). However, a stock worth considering within the same sector is Leap Wireless , which currently carries a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
VERTEX ENERG VTNR 8.28 +10.98%
MODINE MANUF MOD 17.20 +9.28%
CLAYTON WILL CWEI 139.99 +7.24%
KNIGHTSBRIDG VLCCF 13.29 +5.98%
E*TRADE FINA ETFC 22.66 +5.40%