Windstream Corp.’s second-quarter profit fell 44 percent, which the company attributed to costs and expenses from its acquisition of Paetec Holding Corp. in December.
Arkansas-based Windstream reported net income of $54.2 million, or 9 cents a share, down from $96.7 million, or 19 cents a share, in 2011.
Analysts, on average, expected earnings of 13 cents a share.
Windstream posted revenues of $1.54 billion for the quarter, up 50 percent from a year ago, which was on-par with analysts’ expectations. Revenues were down 1 percent on a pro forma basis.
The company said, in a statement, that profits were affected by $6 million in restructuring costs and $12 million in after-tax merger and integration expenses. Excluding those items, Windstream said its adjusted earnings per share would have been 12 cents a share for the second quarter.
Overall, Windstream’s total costs and expenses rose 78 percent to $1.3 billion for the quarter.
The company said it expects to complete its reorganization during the third quarter, which will result in annualized savings of $30 million to $40 million. It also said it is on track to achieve operating synergies of $50 million in 2012, and $100 million by the end of 2014, related to the acquisition of Paetec.
In May, Windstream announced plans to eliminate 375 to 400 management positions, or 3 percent of its workforce, in an effort to increase efficiency.
“As a result of continued sales success in our business channel, as well as expected cost savings from the Paetec acquisition and our management reorganization, we expect to see sequential improvement in revenue and adjusted (operating income before depreciation and amortization) for the remainder of the year, particularly the fourth quarter,” said CEO Jeffrey Gardner. “We remain positioned well to sustain our dividend, deleverage the balance sheet and consider additional shareholder friendly activities over time.”
Shares of Windstream stock (NasdaqGS: WIN) were trading Thursday morning at $9.23, down 8 percent, or 81 cents, from Wednesday’s close.
(c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.
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