Windstream 4Q profit falls 7 percent as revenue slides, merger and other costs riseBy AP
Thursday, February 18, 2010
Windstream 4Q profit falls 7 pct as revenue slides
LITTLE ROCK, Ark. — Fixed-line phone company Windstream Corp. on Thursday reported a 7 percent drop in fourth-quarter earnings, as it continued to lose traditional phone customers and booked higher costs.
The company, which has been on an acquisition spree, earned $75.5 million, or 17 cents per share, compared with $81.1 million, or 19 cents per share, in the same quarter a year earlier. In the latest period, Windstream booked 8 cents per share in charges related to pension expenses, merger and integration costs, restructuring charges and amortization expenses.
Analysts were expecting 20 cents per share in profit, according to a Thomson Reuters poll. The estimate includes pension costs and amortization expenses. As such, Windstream’s earnings met expectations when these costs, amounting to 3 cents per share, are added back to its 17 cents per share profit.
Revenue fell by 3 percent to $754.4 million from $777.5 million but still topped analysts’ $739 million forecast.
Windstream said it added 27,500 net new high-speed Internet customers during the quarter, to end the period with a total of 1.13 million subscribers. The net additions are up 57 percent from the 2008 quarter.
Windstream added just 9,900 net new digital TV customers — it offers Dish Network Corp.’s satellite TV service — during the quarter. That’s down 49 percent from the prior year. Windstream ended the quarter with 369,400 digital TV customers.
The phone company said traditional phone customers continued to drop service. Net access lines fell by 35,000 to 3 million, including its Lexcom Inc. and D&E Communications Inc. acquisitions.
Phone companies have been losing landline customers as more people migrate to cell phones or sign up for cable Internet phone service as part of a discounted bundle of TV, phone and Internet products. In the prior year, Windstream lost 51,000 landline customers.
The company, based in Little Rock, Ark., said customers paid on average $82.31 a month, up 2 percent year-over-year.
For the full year, Windstream earned $334.5 million, or 76 cents per share, compared with a profit of $412.7 million, or 93 cents per share, in 2008. Revenue fell 6 percent to $3 billion.
Windstream said it expects to record 2010 revenue of $3.54 billion to $3.68 billion. Analysts have forecast $3.08 billion, on average.
Shares of Windstream were up 14 cents to $10.65 in afternoon trading.
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