Windstream (Nasdaq: WIN) takes hit on Q4 profit, but acquisitions drive up revenue 30%

Windstream (Nasdaq: WIN) may have suffered a minor profit setback because of acquisition charges, but that did not stop the service provider's revenue from rising 30 percent.

During the quarter, Windstream's profit declined 4 percent to $72.4 million, or 15 cents per share, from $75.5 million, or 17 cents per share, in Q4 2009. In Q4 2010, Windstream had to incur 4 cents per share charge on various items including acquisition-related costs.  

While there was a lot of attention around Tier 2 ILEC consolidation with Frontier completing its acquisition of Verizon's rural lines and the pending merger between CenturyLink (NYSE: CTL) and Qwest (NYSE: Q), Windstream made four acquisitions in 2010.

In 2010, Windstream acquired four smaller service providers, including another independent ILEC (Iowa Telecom), two competitive providers (Q-Comm and NuVox) and a data center company (Hosted Solutions).

Company revenue rose to $981 million, up from $754.4 million in Q4 2009, surpassing analyst expectations of $979.5 million.

Here are some of Windstream's key service performance metrics:

  • Landline Loss: During the quarter, Windstream lost about 36,000 traditional access lines, or 3.6 percent year-over-year. At the end of 2010, Windstream had a total of 3.3 million access lines.
  • Broadband Services: Broadband access continued to rise in Q4 as the service provider signed up over 12,000 new DSL subscribers, bringing its total broadband customer base to about 1,303,000, a 6 percent year-over-year increase. Windstream's overall broadband penetration is now 43 percent of total voice lines and 61 percent of primary residential lines.
  • Video Services: Through its satellite resale agreement with DISH Network, Windstream reported that it had a total of 434,000 video customers, up 8 percent from 2009 and 23 percent of its primary residential customers.
  • Business Services: Continued adoption of advanced data and integrated voice/data solutions helped drive up business services revenue 6 percent year-over-year. At the same time, the increased demand for wireless backhaul services drove up special access circuits five percent.

Looking forward to 2011, Windstream said that 2011 revenue would flat to up 3 percent in a range of $4.02 billion to $4.14 billion.

To achieve its growth targets in 2011, Jeff Gardner, President and CEO of Windstream said that they will "invest capital in success-based initiatives that will help us grow the business, including fiber-to-the-cell projects and data center expansions as well as additions to our broadband network funded in part by federal stimulus awards."

For more:
- see the earnings release
- Reuters has this article
- here's FierceTelecom's Q4 earnings summary

Related articles:
Windstream Q3 revenues boosted by business, broadband services
Telecom's fiber network feeding frenzy: Top mergers and acquisitions
Windstream boosts fiber footprint with KDL

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