A Conversation with Jeff Gardner on Windstream's Growth, A Pivotal 2011

by Luke Jones  on Wednesday, Mar. 28, 2012 9:32 am  

Windstream CEO Jeffery Gardner

In 2006, Windstream Corp. was the small, wireline spinoff of Alltel Corp. of Little Rock, a regional wireless firm well on its way to being acquired by a national giant, Verizon Wireless.

Six years later, the company has transitioned from relying on older, less lucrative businesses -- residential wireline voice and long-distance -- to more profitable, growing services, including cloud computing, broadband and managed services.

And CEO Jeffrey Gardner has led the way.

This week, Arkansas Business published profiles of the state's 17 public company CEOs, featuring new interviews with top executives including Gardner, whose sees 2011 as a pivotal year -- the greatest yet -- for the growing company.

"It really gave me great pride that this group was one of the few companies to go from one that was declining to one that's growing," Gardner told Arkansas Business. "It took a tremendous amount of effort over five years of strategic execution. That's what I feel proudest about."

Small Start

In 2011, FierceTelecom called Gardner one of wireline's most powerful people.

But Windstream didn't start with that power. Gardner said the company's revenue started out declining by 5 percent each year, and investors predicted Windstream would pay its dividend for a while, then fizzle out.

What happened instead was innovation. Rather than relying only on land lines, Gardner brought Windstream into the realms of high-speed Internet services for businesses, rural broadband and managed data centers. Most recently, Windstream began a service called Merge that streams online videos through TV sets.

"Lots of companies pay dividends because they're not growing," Gardner said. "Our investors see not only an opportunity for growth, but the highest dividend in the S&P 500."

Windstream currently pays an annual dividend of $1 per share.

"It's very rewarding to see that we were able to go through that together, that from declining by 5 percent, we've gotten to where we want to be," Gardner said. "We go around, we talk to our investment analysts, and they say that we're a company that fights way above our weight class. Even though we're not the biggest telecom in the country, we're very influential."

It's also moving up in weight: Since 2006, the company has absorbed nine other businesses, including Valor Telecommunications Enterprises LLC, CT Communications, D&E Communications Inc., Lexcom, NuVox Inc., Iowa Telecommunication Services Inc., Hosted Solutions, Q-Comm Corp. and Paetec Holding Corp.

Into the Fortune 500

Of those, last year's $2.3 billion Paetec purchase proved the most notable, propelling Windstream into the Fortune 500.

The merger met some opposition from city groups in Rochester, N.Y., but was approved when Gardner agreed to continue the redevelopment of Midtown Tower, a venerable shopping mall in Rochester that was being turned into a headquarters for Paetec. The company broke ground on the development on Monday.



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