Windstream Q2 Profit Down 22%, Lowers Full-year Revenue Outlook

(RTTNews) - Communications and technology solutions provider Windstream Corp. (WIN) on Thursday reported a 22 percent decline in profit for the second quarter on lower revenue. Looking ahead, the company lowered its revenue growth outlook for fiscal 2013.

The company also said it is exploring the formation of a holding company to become the new publicly-traded parent company of Windstream and its subsidiaries.

The Little Rock, Arkansas-based company's net income for the second quarter was $39.7 million or $0.06 per share, down from $51.0 million or $0.09 per share in the year-ago period. The latest quarter's results include about $0.01 in after-tax merger and integration and restructuring expense.

Excluding these non-operational charges, adjusted earnings for the latest quarter were $0.07 per share. On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues and sales for the quarter declined 2 percent to $1.51 billion from $1.53 billion in the prior-year quarter. Analysts had a consensus revenue estimate for the quarter of $1.51 billion.

Service revenues for the quarter declined 1 percent from the year-ago period to $1.45 billion, while product sales decreased 14 percent to $56.3 million.

Strategic revenue, which consists of total business and consumer broadband revenues, grew 3 percent year-over-year and represented 71 percent of the company's total revenues.

Total costs and expenses for the quarter declined 2 percent from the prior-year period to $1.28 billion.

Looking ahead, Windstream updated its financial outlook for the remainder of fiscal 2013. The company now expects total revenue for the year to decline 1 percent to 3 percent compared to the prior year, largely due to a modestly softer business sales environment and continuing pressure in the carrier transport business. Earlier, the company projeced full-year revenue in a range of a 2 percent decline to a 1 percent increase.

Analysts have a consensus revenue estimate of $6.05 billion for the year.

Windstream also said it is exploring the formation of a holding company to become the new publicly-traded parent company of Windstream and its subsidiaries.

The company noted that the modified ownership design would enhance its corporate structure, strengthen its credit profile and provide greater financial flexibility. The revised corporate structure would mirror that of similar large companies, the company added.

In Thursday's regular trading session, WIN is trading at $8.31, down $0.29 or 3.38 percent on a volume of 7.08 million shares.