Windstream 4Q loss $86.9M

For 2016, LR telecommunications firm $384M in the red

Graphs showing Windstream fourth quarter information.
Graphs showing Windstream fourth quarter information.

Windstream Holdings lost $86.9 million in the fourth quarter compared with net income of $141 million in the same period of 2015, the Little Rock telecommunications company said Wednesday.

For the quarter, Windstream lost 94 cents a share, below the average estimate of a loss of 63 cents a share by eight analysts surveyed by Thomson Reuters. That compares with earnings of $1.41 a share in the fourth quarter of 2015.

Windstream shares closed at $7.56 Wednesday, up 9 cents a share in trading on the Nasdaq exchange.

The stock behaved remarkably well Wednesday, considering that Windstream has had negative earnings reports for three of the past four quarters, said Bob Williams, senior vice president and managing director of Simmons First Investment Group Inc. in Little Rock.

For the year, Windstream lost $384 million compared with a profit of $27 million in 2015.

Tony Thomas, Windstream's chief executive officer, said in a prepared statement that the company "delivered consistent results across our core business units and returned value to shareholders through our dividend."

This week, Windstream announced the closing of its acquisition of EarthLink, an Internet and network products and services business.

Windstream expects the benefits from the EarthLink merger to "significantly" improve the business trends for Windstream, said Bob Gunderman, the company's chief financial officer, in Windstream's conference call with analysts.

The benefit from EarthLink remains to be seen, Williams said.

"They've done some projections and it shows there may be operational efficiencies to be gained by the merger," Williams said.

Planning on the integration of EarthLink "is progressing well," Thomas said.

"We expect to achieve $150 million in annual [benefits] within three years [from EarthLink], exceeding our original expectations by $25 million," Thomas said.

Other acquisitions for Windstream could be expected, Williams said.

"Anywhere they can create additional income, I would imagine they're open to it," Williams said.

Thomas said he feels good about Windstream's capabilities.

"We will be very cognizant of [acquisition possibilities] to make sure they advance our strategy," Thomas said. "Given where we're at, I feel good about our ability to take on more [acquisitions]."

Business on 03/02/2017

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