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

Suggested Articles

Equinix has expanded the global reach of Oracle Cloud Infrastructure across five continents to help enterprise customers connect to Oracle Cloud.

Deutsche Telekom is folding parts of a slimmed-down T-Systems back into its corporate structure, according to Reuters.

Huawei has been temporarily suspended from membership in the Forum of Incident Response and Security Teams (FIRST.)