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Shares of Windstream Corp.—which acquired Paetec Holding Corp. last year—sank some 10 percent after its first-quarter results missed Street expectations.
Shares of Windstream stock (NasdaqGS: WIN) were trading mid-afternoon at $10.10, down 10 percent or $1.16 from Wednesday’s close.
Windstream closed on a $2.3 billion acquisition of Paetec in December.
The Arkansas-based company reported net income of $64.6 million, or 11 cents a share, up from $29.4 million, or 6 cents a share, a year ago.
However, adjusted operating income before depreciation and amortization was $594 million, a decrease of 1.6 percent on a pro forma basis, the company said. Adjusted OIBDA removes the impact of restructuring charges, pension expense and stock-based compensation.
Taking out acquisition-related costs and a gain on early debt extinguishment, earnings were 13 cents a share, the company said.
Analysts, on average, had expected the company to reported earnings per share of 14 cents on revenues of $1.56 billion.
Windstream logged revenue of $1.5 billion for the quarter, up from $1 billion in 2011. Total revenues and sales were $1.55 billion, down 0.5 percent, on a pro forma basis.
President and CEO Jeffery Gardner said, in a statement, that the purchase of Paetec played a big role in the company’s 6 percent increase in consumer broadband service revenues.
“Our business and consumer channels delivered a strong performance during the first quarter,” Gardner said. “The business channel has gained significant traction with the acquisition of Paetec, and our combined team is having tremendous success driving new sales opportunities.”
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