Windstream's business revenue rises to $749M, but overall results decline 2%

Windstream reported that enterprise and small-business service revenue was $749 million in the second quarter, a slight increase sequentially from $748 million in the first quarter.

Within the business segment, data and integrated services grew 3 percent in the second quarter from the same period a year ago to $418 million due to sales of IP-based solutions and next generation data.

Over the past year, Windstream grew the amount of enterprise locations it serves by 3 percent from the same period a year ago, and average revenue per business customer increased 9 percent year-over-year.

The service provider also saw gains in data and managed services revenues, which rose 20 percent year-over-year to $31 million.

Jeff Gardner, CEO of Windstream, said in the earnings release that the company has expanded its business marketing programs to strengthen sales and is seeing "continued solid sales momentum and positive trends supporting our efforts to move up-market."

Another bright spot was consumer broadband service, where revenues rose 0.4 percent to $121 million. Overall consumer service revenues in the second quarter were $317 million, an increase of 1.2 percent sequentially and a decrease of 2.8 percent from the same period a year ago.

"We are making solid progress in the consumer channel with an increased focus on marketing and sales, as well as network enhancements and expansion and new pricing initiatives," Gardner said.

In the carrier market, revenue declined 6 percent to $155 million year-over-year due to wireless operators shutting off legacy T-1 circuits as they move to fiber-based Ethernet backhaul services. Likewise, second-quarter wholesale revenues were $141 million, down 6 percent from the same period a year ago primarily due to a decline in switched access revenue from lower intrastate access rates and fewer minutes of use.

Overall revenues and sales were $1.5 billion, down 2 percent from the same period a year ago. Windstream said that on a sequential basis, total revenues increased slightly due to improvements in the consumer channel along with growth in business product sales.

One of the biggest developments that Windstream embarked on during the quarter was its plan to spin off certain telecommunications network assets into an independent, publicly traded real estate investment trust (REIT). Under the terms of that plan, Windstream will control and maintain the assets for the exclusive use of Windstream and continue to have sole responsibility for meeting its existing regulatory obligations.

Shares of Windstream were trading $11.21, down 34 cents or 2.94 percent, in late Thursday morning trading on the Nasdaq stock exchange.

For more:
- see the earnings release

Special report: Wireline telecom earnings in the second quarter of 2014

Related articles:
Will AT&T, Verizon follow Windstream down the REIT asset path?
Windstream's business services remain flat, but IP-based data grows 3 percent to $414M
Windstream makes Avaya-based UCaaS service nationally available
Windstream to spin off network assets into REIT
Windstream wins DoD contract, goes nationwide with UCaaS
Windstream to reach 75,000 rural households with broadband stimulus grants

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