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Windstream Reports $66M 3Q Loss, Revenue Down 10 Percent

2 min read

Windstream Holdings Inc. of Little Rock on Monday reported another third-quarter net loss as revenue declined 10 percent and the company announced a $1.1 billion merger.

Shares of the publicly traded telecommunications firm (Nasdaq: WIN) rose more than 1.5 percent in early trading after it said it would merge with EarthLink Holdings Corp. of Atlanta in an all-stock deal aimed at expanding its footprint and offering enterprise customers more services.

The deal, subject to regulatory approval and other usual conditions, is set to close in the first half of next year.

The announcement came on the heels of its quarterly results, which showed a net loss of $66.2 million, or 72 cents per share — a bigger loss than the $7.2 million, or 8 cents per share, loss the company reported in the same quarter last year.

Revenue also declined, falling 10 percent from the same quarter last year to $1.34 billion.

In a news release, President and CEO Tony Thomas said the company grew consumer service revenue from the second quarter by $1 million and expanded contributions from its enterprise business by 31 percent from the same quarter last year.

“We continued to make prudent capital investments to better leverage our extensive network to serve customers and provide incremental returns to shareholders,” Thomas said. “Additionally we further improved our debt maturity profile and reduced future cash interest.”

Consumer and small business ILEC service revenue was $395 million, down 1 percent from the same time last year. Consumer average revenue per household increased by 6 percent year-over-year “driven by broadband speed penetration gains across all tiers, improved modem rentals and sales of bundled services,” the company said.

Wholesale service revenue was $155 million, down 8 percent from the same time last year.

Enterprise service revenue was $495 million, with enterprise contribution margin of $83 million, or 16 percent — up by $20 million, or 31 percent, from the same quarter last year.

Small business CLEC service revenue was $119 million and contribution margin was $37 million, or 31 percent.

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