Windstream's business, broadband services drive up Q4 and 2011 results

Windstream (Nasdaq: WIN) has fashioned itself as a broadband and business service provider and its Q4 2011 and 2011 year results show that those efforts are paying off for the independent ILEC.

Windstream Q4 2011

Click here for details from Windstream's investor presentation.

For Q4 2011, the service provider reported total revenues of $1.6 billion, up 0.7 percent year-over-year on a pro forma basis.

However, Windstream's full-year pro forma total revenues declined 0.3 percent from 2010 to $6.2 billion, while adjusted OIBDA increased 1.2 percent to $2.4 billion.

"As a result of solid execution in our legacy business, coupled with our targeted acquisition approach, we significantly improved the financial trajectory of our company and reached a significant milestone of growing pro forma revenue and Adjusted OIBDA during the fourth quarter on a year-over-year basis, giving us great momentum heading into 2012," said Jeff Gardner, president and CEO in the earnings release.

One of Windstream's big moves to bolster its business portfolio in 2011 was its acquisition of PAETEC, a deal which instantly added over 36,000 miles of fiber to its network and seven data centers.

In tandem with its PAETEC acquisition, the service provider aggressively grew its wholesale Fiber to the Tower (FTTT) program to serve wireless operators and increased its data center footprints to a total of 21 centers that can offer an array of colocation space, managed services, and cloud services.

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

  • Landline losses: As expected, traditional voice lines declined from 2 million to 1.93 million in Q4 2011. Overall pro forma consumer service revenues declined 2.5 percent to $341 million from 2010. For the full year, consumer service revenues were $1.4 billion, a decrease of 2.6 percent.
  • Broadband and video: Despite an overall decline in consumer revenues, consumer broadband was a different story as revenues rose 7 percent from Q4 2010 to $118 million. For the full year, consumer broadband revenues rose 9 percent to $464 million. As of the end of Q4, the service provider had 1.2 million broadband subscribers and 445.8 satellite video subscribers.
  • Business services: Buoyed by its own internal growth initiatives and the closing of its PAETEC acquisition in Q4 2011, Windstream's business service revenues rose 2.5 percent on a pro forma basis to $888 million. For the year 2011, business service revenues increased 1.8 percent to $3.5 billion.

Looking towards the rest of 2012, the service provider has forecast pro forma revenues in the range of $6.18 billion to $6.3 billion. 

Windstream's shares were down approximately 2.97% in midday trading to $12.10, a loss of 37 cents from its opening price of $12.48.

For more:
- see the earnings release

Special report: Wireline in the fourth quarter 2011

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