Windstream Q3 revenues get boost from broadband, business and FTTT sales

Windstream (Nasdaq: WIN) on Thursday reported that Q3 revenues and sales were $1.55 billion, down slightly less than 1 percent from Q3 2011.

On a sequential basis, revenues climbed to $15 million over Q2, which the ILEC said was "the largest sequential improvement recorded to date."

Adjusted OIBDA declined 1 percent year-over-year from Q3 2011 to $603 million, but improved sequentially to $7 million over $596 million in Q2 2012 due to cost cutting initiatives.

With its acquisition of PAETEC behind it, Windstream restructured its management team and simplified its operating model, which it said would help it more effectively serve its customers and achieve $40 million in annual savings.   

In addition, the telco achieved a run rate of $60 million in operating synergies through Q3, adding that has paved the path to achieve $100 million in total by the end of 2014 related to its PAETEC acquisition.

Here's a breakdown of the service provider's key operating metrics:

  • Business Services: Business service revenues rose 3 percent year-over-year to $906 million. Driven by growth in IP, next generation data and data center services, the big revenue contributors in the business revenue mix were data and integrated services, which rose 9 percent year-over-year to $388 million. At the end of the quarter, Windstream had almost 650,000 business customers.

  • Consumer Services: In the consumer segment, broadband continued to be a factor in Q3. Consumer broadband service revenues rose 4 percent to $115 million from the same period a year ago. The service provider added about 6,000 new broadband subscribers during the quarter, bringing its penetration of primary voice lines to 70 percent. However, consumer voice lines declined 4 percent year-over-year, ending the quarter with a total of about 1.87 million voice lines. Overall, consumer service revenues were $335 million, essentially unchanged from the second quarter of 2012 and a decrease of 3 percent from the same period a year ago.

  • Wholesale Services: Wholesale revenues were $220 million, a decline of 10 percent from Q3 2011 and in line with expectations due to declines in legacy circuit revenue. Once again, Windstream's carrier service revenues rose 3 percent year-over-year to $162 million, an increase of 3 percent, a factor it attributes to ongoing fiber-to-the-tower installations for its wireless operator customers and other carriers.

Shares of Windstream were trading at $8.76, down 66 cents, or 7.01 percent, in Thursday morning trading on the NASDAQ stock exchange.

For more:
- see the earnings release

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