by Lance Turner
Posted 8/8/2013 07:15 am
Updated 7 months ago
Windstream Corp. of Little Rock said Thursday that second-quarter net income was $40 million, down 21 percent from the same time last year.
The publicly traded telecommunications firm (NYSE: WIN) also reported revenue of $1.51 billion, down 2 percent from $1.53 billion in the same quarter last year.
Earnings per share reached 6 cents, down from 9 cents during the same time last year. While Windstream revenue was in-line with expectations, analysts had expected EPS of 9 cents per share in the second quarter.
Total consumer revenue also dropped, down 3 percent to $327 million. Still, Windstream saw growth in a pair of closely watched "strategic" areas, business revenue and consumer broadband.
The company said business service revenues reached $913 million, up 2 percent from last year. Consumer broadband service revenues reached $120 million, up 6 percent.
The company, which began as rural wireline provider spun off from Alltel Corp. in 2006, has been remaking itself as a data services and broadband provider for business and consumers, as traditional landline revenue continues to dwindle.
"Our strategy to reposition Windstream in growth areas is driving steady results," Jeff Gardner, president and CEO, said in a news release. "Additionally, we continue to strike a prudent balance among reinvesting in the company, paying an attractive dividend and reducing debt over time."
On Wednesday, Windstream declared a 25-cent quarterly dividend.
Also Thursday, Windstream said it is exploring creating a publicly traded holding company to become the parent company of Windstream and its subsidiaries.
The company said the "modified ownership design would enhance Windstream’s corporate structure, strengthen its credit profile and provide greater financial flexibility. The revised corporate structure would mirror that of similar large companies."
Windstream said it doesn't expect a change in its current dividend practice as a result of forming the new company.
"The company will make a final decision regarding the proposed structure after all regulatory approvals are obtained and its analysis is completed," the company said.
Windstream also cut its financial outlook for the rest of the year, calling for total revenue to decline 1 percent to 3 percent compared to 2012 "largely due to a modestly softer business sales environment and continuing pressure in the carrier transport business."
In February, the company called for between a 2 percent decline and a 1 percent increase.