Windstream Q2: Profit down, but revenue up 22 percent

Windstream's (Nasdaq: WIN) Q2 earnings were a mixed bag of lower landline loss and slow seasonal broadband growth.

While Q2 profit may have declined 13 percent to $79 million, the completion of its acquisition of Iowa Telecom Services in June helped lift quarterly revenue by 22 percent over Q2 2009 to $917 million.

Here are some of the key service performance metrics:

  • Landline Loss: Much like the rest of the traditional ILEC community, Windstream was not immune to ongoing landline loss to cable competitors and wireless substitution. During the quarter, Windstream's access lines declined year-over-year by 3.7 percent or a total of 34,000 lines. However, Windstream's quarterly landline loss was lower than the 10 percent annual average decline other ILECs saw this quarter.
  • Broadband Access: While Windstream signed up about 14,800 new broadband DSL customers in Q2, it trailed the 34,800 additions it had in the first quarter and 36,600 it gained in the second quarter 2009. Windstream's CEO Jeff Gardner said the drop in broadband subscribers was a Q2 seasonal trend. As of the end of Q2, Windstream had 1.14 million broadband lines, with 41 percent penetration on voice lines and 58 percent of primary residential lines.
  • Video Services: Although Windstream added 8,000 new Dish Network satellite video subscribers, it was a decline from the 12,800 it signed up in Q1 but above the 1,400 it signed up in Q2 2009.
  • Business Services: Windstream business services segment, which provides voice/data services to SMBs and larger enterprises, increased one percent.

With the completion of its acquisitions of Iowa Telecom Services and competitive business provider NuVox Communications--two acquisitions that will expand Windstream's presence to 23 states--forecast that 2010 revenue will be between $3.82 billion to $3.90 billion.

For more:
- see the earnings release here
- Minneapolis Star Tribune via AP has this article

Related articles:
Windstream Q1: broadband up, line loss declines
Windstream stems landline bleeding with double-play offering
Windstream: Q4 09 profit drops, but broadband, TV were up
Don't hang up on wireline yet
Windstream makes big fiber network bet
Windstream offers lifetime data/voice bundle

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