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Windstream shares fall after profit declines 30 percent

Rochester Business Journal
November 8, 2012

Profit at Windstream Corp. fell more than 30 percent during the third quarter, in part because of merger, integration and restructuring charges.

Arkansas-based Windstream, which acquired Paetec Holding Corp. last December, reported a net income of $53.7 million, or 9 cents per share, for the quarter, down from $78.1 million, or 15 cents a share, a year ago.

The company logged revenues of $1.55 billion, up from $1billion a year ago, but down 1 percent on a pro forma basis, which includes Paetec results and excludes merger and acquisition costs related to strategic transactions.

Analysts expected revenues of $1.56 billion and earnings of 13 cents a share.

Windstream officials said results for the quarter included $7.8 million in after-tax merger and integration expenses, and $7.5 million in restructuring costs. Excluding those charges, earnings would have been 12 cents a share for the quarter, the company said.

Windstream’s total cost and expenses were $1.3 billion, up from $750 million last year. The company said it has completed restructuring of its management organization during the third quarter, which it estimated will result in annual savings of approximately $40 million.

“Our business continues to perform well, and I am confident in our ability to deliver strong free cash flow long-term to support our dividend,” said Jeffery Gardner, president and CEO of Windstream, in a statement. “The dividend is a key component of our investment thesis, and we believe it is the best way to provide returns to our shareholders.”

Shares of Windstream stock (NasdaqGS: WIN) were trading Thursday midday at $8.61, down nearly 9 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

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