Windstream revenue up, profits down

ssloan@herald-leader.comNovember 8, 2012 

With sales boosted by acquisitions, Windstream, which provides telephone and broadband services in Lexington, announced an increase in third-quarter revenue on Thursday.

The company, based in Little Rock, Ark., generated $1.55 billion in sales in the quarter, up 52 percent from $1.02 billion for the same period in 2011.

But a number of costs increased more quickly than sales, leading net income to fall to $53.7 million, or 9 cents a share, from $78.1 million, or 15 cents a share, a year ago. The results also included about $7.8 million in after-tax merger and integration expenses, as well as $7.5 million in restructuring costs.

"Our business continues to perform well," CEO Jeff Gardner said in a statement.

The company continued its shift toward focusing on business revenues and broadband for consumers as it seeks to expand from its reliance on land-line telephone access. Last year, it acquired PAETEC, a business-focused company with several data centers.

Land-line telephone access continued to see declines as the company ended the quarter with 1.87 million voice lines, down from 1.95 million a year ago.

Had Windstream owned its newest businesses at this time last year, overall quarterly revenue would have declined less than 1 percent year over year. Business service revenues, though, would have risen 3 percent to $906 million, while consumer broadband sales would have increased 4 percent to $115 million.

The restructuring charges in the quarter include completion of a management reorganization. Looking to reduce expenses, the company eliminated about 350 positions overall, about 3 percent of its work force. In Lexington, five management positions were eliminated. The restructuring is expected to save $40 million annually.

Scott Sloan: (859) 231-1447. Twitter: @HeraldLeaderBiz

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