Windstream Holdings Inc. reported disappointing results in third-quarter 2017. The company’s bottom and top line lagged the Zacks Consensus Estimate.
Windstream currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Net loss on a GAAP basis was $101.5 million or a loss of 55 cents per share compared with a net loss of $66.2 million or a loss of 72 cents in the year-ago quarter. Windstream’s quarterly loss of 55 cents was wider than the Zacks Consensus Estimate of a loss of 46 cents.
Revenues
Total revenues increased 11% year over year to $1,497.7 million in the reported quarter, lagging the Zacks Consensus Estimate of $1,508 million. Service revenues increased 12% to $1,472.4 million, while Product revenues declined 3% to $25.3 million.
Operating Metrics
In the reported quarter, total operating expenses were $1,454.7 million, up 20% year over year. Operating income was $43 million compared with $129.4 million in the prior-year quarter. Adjusted OIBDA (operating income before depreciation and amortization) was $326.8 million, down 7.1% year over year.
Cash Flow
In the third quarter of 2017, Windstream generated $271.7 million of cash from operations compared with $197.6 million in the prior-year quarter. Adjusted free cash flow was $62.2 million compared with $95.8 million in the year-ago quarter.
Liquidity
Windstream exited the third quarter with $56.5 million of cash and cash equivalents and $5,857.4 million of total debt compared with $59.1 million and $4,848.7 million, respectively, at the end of 2016.
Segment-Wise Information
Consumer & Small Business - ILEC: Total revenues were $381.1 million, down 4% year over year. Of the total, Consumer revenues were $303.2 million, down 3%. Small Business – ILEC revenues totaled $77.9 million, down 7%. Total profit for the segment was $200.9 million, down 2%.
Consumer & Small Business – CLEC: Revenues totaled $229.5 million, up 89% year over year. Segment profit was $77.5 million, up 108%.
Wholesale: Revenues in this segment were $172.5 million, up 11% year over year. Segment profit was $113.5 million, flat year over year.
Enterprise: Total revenues were $567 million, up 12% year over year. Of the total, Service revenues were $554.4 million, up 12%. Product sales were $12.6 million, down 5%. Total profit for the segment was $106 million, up 17% year over year.
Subscriber Statistics
As of Sep 30, 2017, the company had 1.2882 million household customers, down 7%. High-speed Internet customer base was 1.0174 million, down 4% while the digital-TV customer base was 0.2896 million, down 12%. ILEC small business customers totaled 0.1274 million, down 8%. Enterprise customers were 0.0339 million, up 29% year over year. CLEC consumers were 0.6465 million, down 4.9% and CLEC small business customers were 0.105 million, up 37%.
Financial Outlook for 2017
Windstream reaffirmed its 2017 financial guidance. The company expects service revenue trends similar to 2016 trends and adjusted OIBDAR between $2.02 billion and $2.04 billion. The company expects adjusted capital expenditures between $790 million and $840 million.
Recent Events
Windstream announced that it will be promoting its SDN-enabled multi-vendor services in partnership with Ciena Corporation (CIEN - Free Report) , Infinera Corporation (INFN - Free Report) and Coriant in the MEF17 Proof of Concept showcase from November 13-16, in Orlando. MEF17 focuses on advancing Third-Network connectivity and cloud services for the digital economy & the hyper-connected world.
Windstream will be enhancing its Cloud Connect solution by introducing a wide range of connectivity options for its cloud customers. Customers can choose any network connection from Windstream to create a dedicated, high-speed, vastly secure cloud-optimized network connection to major Cloud Service Providers including Amazon.com, Inc.’s (AMZN - Free Report) Web Services, Microsoft Corporation’s Azure, International Business Machines Corporation’s Bluemix, Google Cloud, Oracle Fast Connect and Salesforce.
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Windstream Holdings Inc. reported disappointing results in third-quarter 2017. The company’s bottom and top line lagged the Zacks Consensus Estimate.
Windstream currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Net loss on a GAAP basis was $101.5 million or a loss of 55 cents per share compared with a net loss of $66.2 million or a loss of 72 cents in the year-ago quarter. Windstream’s quarterly loss of 55 cents was wider than the Zacks Consensus Estimate of a loss of 46 cents.
Revenues
Total revenues increased 11% year over year to $1,497.7 million in the reported quarter, lagging the Zacks Consensus Estimate of $1,508 million. Service revenues increased 12% to $1,472.4 million, while Product revenues declined 3% to $25.3 million.
Operating Metrics
In the reported quarter, total operating expenses were $1,454.7 million, up 20% year over year. Operating income was $43 million compared with $129.4 million in the prior-year quarter. Adjusted OIBDA (operating income before depreciation and amortization) was $326.8 million, down 7.1% year over year.
Cash Flow
In the third quarter of 2017, Windstream generated $271.7 million of cash from operations compared with $197.6 million in the prior-year quarter. Adjusted free cash flow was $62.2 million compared with $95.8 million in the year-ago quarter.
Liquidity
Windstream exited the third quarter with $56.5 million of cash and cash equivalents and $5,857.4 million of total debt compared with $59.1 million and $4,848.7 million, respectively, at the end of 2016.
Segment-Wise Information
Consumer & Small Business - ILEC: Total revenues were $381.1 million, down 4% year over year. Of the total, Consumer revenues were $303.2 million, down 3%. Small Business – ILEC revenues totaled $77.9 million, down 7%. Total profit for the segment was $200.9 million, down 2%.
Consumer & Small Business – CLEC: Revenues totaled $229.5 million, up 89% year over year. Segment profit was $77.5 million, up 108%.
Wholesale: Revenues in this segment were $172.5 million, up 11% year over year. Segment profit was $113.5 million, flat year over year.
Enterprise: Total revenues were $567 million, up 12% year over year. Of the total, Service revenues were $554.4 million, up 12%. Product sales were $12.6 million, down 5%. Total profit for the segment was $106 million, up 17% year over year.
Subscriber Statistics
As of Sep 30, 2017, the company had 1.2882 million household customers, down 7%. High-speed Internet customer base was 1.0174 million, down 4% while the digital-TV customer base was 0.2896 million, down 12%. ILEC small business customers totaled 0.1274 million, down 8%. Enterprise customers were 0.0339 million, up 29% year over year. CLEC consumers were 0.6465 million, down 4.9% and CLEC small business customers were 0.105 million, up 37%.
Financial Outlook for 2017
Windstream reaffirmed its 2017 financial guidance. The company expects service revenue trends similar to 2016 trends and adjusted OIBDAR between $2.02 billion and $2.04 billion. The company expects adjusted capital expenditures between $790 million and $840 million.
Recent Events
Windstream announced that it will be promoting its SDN-enabled multi-vendor services in partnership with Ciena Corporation (CIEN - Free Report) , Infinera Corporation (INFN - Free Report) and Coriant in the MEF17 Proof of Concept showcase from November 13-16, in Orlando. MEF17 focuses on advancing Third-Network connectivity and cloud services for the digital economy & the hyper-connected world.
Windstream will be enhancing its Cloud Connect solution by introducing a wide range of connectivity options for its cloud customers. Customers can choose any network connection from Windstream to create a dedicated, high-speed, vastly secure cloud-optimized network connection to major Cloud Service Providers including Amazon.com, Inc.’s (AMZN - Free Report) Web Services, Microsoft Corporation’s Azure, International Business Machines Corporation’s Bluemix, Google Cloud, Oracle Fast Connect and Salesforce.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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