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Windstream’s Q4 profit falls 7% as revenue slips

Thu, 02/18/2010 - 7:10am
The Associated Press

LITTLE ROCK, Ark. (AP) – Fixed-line phone company Windstream Corp. on Thursday reported a 7 percent drop in fourth-quarter earnings as it continued to lose traditional phone customers and booked higher costs.

The company, which has been on an acquisition spree, earned $75.5 million, or 17 cents per share, compared with $81.1 million, or 19 cents per share, in the same quarter a year earlier. In the latest period, Windstream booked 8 cents per share in charges related to pension expenses, merger and integration costs, restructuring charges and amortization expenses.

Analysts were expecting 20 cents per share in profit, according to a Thomson Reuters poll. These estimates typically exclude one-time items.

Revenue fell by 3 percent to $754.4 million from $777.5 million but still topped analysts' $739 million forecast.

Windstream said it added 27,500 net new high-speed Internet customers during the quarter, to end the period with a total of 1.13 million subscribers. The net additions are up 57 percent from the 2008 quarter.

Windstream added just 9,900 net new digital TV customers – it offers Dish Network Corp.'s satellite TV service – during the quarter. That's down 49 percent from the prior year. Windstream ended the quarter with 369,400 digital TV customers.

The phone company said traditional phone customers continued to drop service. Net access lines fell by 35,000 to 3 million after adjusting for its acquisitions of Lexcom Inc. and D&E Communications Inc.

Phone companies have been losing landline customers as more people migrate to cell phones or sign up for cable Internet phone service as part of a discounted bundle of TV, phone and Internet products. In the prior year, Windstream lost 51,000 landline customers.

The company, based in Little Rock, Ark., said customers paid on average $82.31 per month, up 2 percent year-over-year.

For the full year, Windstream earned $334.5 million, or 76 cents per share, compared with a profit of $412.7 million, or 93 cents per share, in 2008. Revenue fell 6 percent to $3 billion.

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