Windstream Reports $121M 1Q Loss

Windstream Reports $121M 1Q Loss

Windstream Holdings Inc. of Little Rock on Thursday reported a first-quarter net loss of $121 million, or 65 cents per share, even bigger than the loss of $111 million (89 cents per share) reported in the same quarter last year.

Despite the larger net loss, the loss per share, 65 cents in the recent quarter, was less than the loss of 89 cents per share reported in the first quarter of 2017 because the average number of shares outstanding grew to 187 million from 126.1 million a year ago. Shareholders have been asked to approve a recommended five-to-one reverse stock split at their annual meeting on May 21.

Windstream stock was trading at $1.55 Thursday morning.

The publicly traded telecommunications company (Nasdaq: WIN) also reported that total revenue and sales were $1.45 billion, with a total service revenue of $1.44 billion in the first quarter.

Total revenue and sales were up 6 percent year-over-year, and total service revenue was up 7 percent.

Operating income was $69 million compared to $44 million in the same period a year ago.

“Our first quarter results show strong traction in our ongoing transformation of the company as evidenced by year-over-year growth in Adjusted OIBDAR,” President and CEO Tony Thomas said in a news release. “Customer demand for strategic services, including Unified Communications as a Service and SD-WAN, continued to grow and represented almost 40 percent of total enterprise sales during the quarter. Our recent network investments also have driven meaningful improvements in our broadband subscriber trends with March representing our best performance in more than five years."

He also said, “Total cash costs improved by more than 6 percent year-over-year, driven in part by our IT integration work, as well as our continued focus on reducing network interconnection expenses and driving improvements in our overall organizational effectiveness."

The company reported the following for its four segments:

  • CLEC consumer service - $48 million in revenue for the first quarter, up 131 percent from the same quarter last year. Spokesman David Avery explained that his is the former EarthLink consumer business. Windstream acquired EarthLink Holdings Corp. of Atlanta last year, and Avery said Windstream had only had one month of EarthLink's business in 2017. 
  • Enterprise service - $733 million in revenue, up 13 percent year-over-year.
  • Consumer and small business ILEC service - $471 million in revenue, down 5 percent from the same time last year.
  • Wholesale service - $184 million in revenue, up 3 percent year-over-year.

The company's guidance for 2018 remains unchanged. Windstream said it expects service revenue trends to be slightly improved versus 2017 trends, adjusted OIBDAR to be in the range of $1.95 billion to $2.01 billion and adjusted capital expenditures to be between $750 million and $800 million.

The company also expects to generate adjusted free cash flow of approximately $165 million, and this outlook assumes cash interest on long-term debt of approximately $385 million, according to the release.