by Robert Bell
Posted 4/27/2011 10:56 am
Updated 11 months ago
Windstream Corp. of Little Rock is seeking up to $30 million in city revenue bonds for servers and other equipment at the data center it is developing at the former National Home Center building at 15707 Chenal Parkway.
The company paid $2.7 million for the property, which will be the site for a 17,000-SF center.
The Little Rock City Board will consider the bonds at its May 3 meeting. If approved, the city will issue the bonds, which Windstream will purchase, and use the proceeds to buy the equipment, said Scott Morris, a Windstream spokesman.
Because the city will own the equipment, it will be exempt from property taxes.
Windstream will make a payment in lieu of taxes to the city equal to 35 percent of what the tax on that equipment would have been. The bonds won't be issued all at once, Morris said.
"We'll continue to pay the full property tax on the building itself and the land," he said.
Morris said the bonds are "a good economic development tool to grow jobs and new industries in Little Rock. We'll be hiring 15 to 20 people initially as part of this project."
The company also announced Wednesday that its Hosted Solutions division, based in Raleigh, N.C., has opened a new data center in Charlotte, N.C.
Windstream (NYSE: WIN) now operates three SAS 70 Type II certified facilities within the Charlotte market, in addition to data centers in Raleigh and Cary, N.C.; Boston; Newton, Iowa; State College and Ephrata, Pa.; Jacksonville, Fla.; Atlanta; and Nashville, Tenn.
Looking to 1Q Earnings
Also Wednesday, Barry McCarver, senior vice president of equity research with Stephens Inc. of Little Rock, reiterated the firm's rating and $18.50 per share target price for Windstream in a research note. Shares were trading at about $12.71 as of mid morning.
McCarver wrote that Windstream's revenue guidance for 2011 was cautious, calling for a range of $4.015 billion to $4.14 billion, which would represent a decline of 3 percent to flat compared to the previous year.
"While residential revenues will likely continue to decline, we would expect to see enterprise revenue more than offset this with improved organic growth," McCarver wrote.
"We continue to like WIN going into 1Q11 results and see upside to management’s guidance for revenue over the course of FY11 as the Company leverages the recent acquisitions of KDL and Hosted Solutions to generate higher revenue in" the second half of 2011, he wrote.
Windstream will report its first quarter results May 4, the same day as its annual stockholders meeting, which will take place at 11 a.m. at the Capital Hotel in Little Rock.
More on Windstream
Click to read this week's Arkansas Business cover story on how Windstream has grown since its 2006 spin-off from wireless company Alltel Corp.