Windstream's Q2 profit falls 13%
LITTLE ROCK, Ark. (AP) – Local phone company Windstream Corp. on Thursday said earnings fell 13 percent in the second quarter, held back by an increase in interest expenses.
Revenue jumped 22 percent as the company completed the purchase of Iowa Telecommunications Services Inc. for $1.2 billion in cash and stock on June 1.
The Little Rock-based company earned $79 million, or 17 cents per share, compared with $90.8 million, or 21 cents per share, a year ago.
Revenues were $917.3 million, down from $752.9 million.
Analysts polled by Thomson Reuters were on average expecting 20 cents per share in earnings and $923.6 million in revenue, but their estimates may not be directly comparable because of varying assumptions about the closing date of the Iowa Telecom deal.
Excluding acquisitions, revenue would have fallen 3 percent as customers kept canceling landlines in favor of wireless service. Windstream lost 34,000 phone lines, an annual rate of 3.7 percent. That's much lower than most other phone companies, some of which are seeing 10 percent annual declines.
Windstream said it expects to record 2010 revenue of $3.82 billion to $3.90 billion, including Iowa Telecom. Analysts had forecast $3.71 billion, on average.
Analyst Christopher King at Stifel Nicolaus called the results "solid" and said Windstream is probably the only smaller phone company that could stabilize its revenue, given that it provides a lot of services to businesses.
Shares of Windstream fell 7 cents to $11.43 in morning trading.
Windstream said eight of its 33 applications for federal broadband build-out funds, provided under last year's economic stimulus bill, have been approved. It will receive $67 million in funds and will invest an additional $22 million. It has another 25 applications under evaluation by the Department of Agriculture.