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Windstream (WIN) Q4 Earnings and Revenues Top Estimates
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Windstream Holdings Inc. delivered impressive financial results in the fourth quarter of 2017. Both the top and bottom line outpaced the Zacks Consensus Estimate.
On a GAAP basis, the company reported net loss of $1,835.7 million or a loss of $10.26 per share compared with a net loss of $86.9 million or a loss of 94 cent per share in the year-ago quarter. However, after adjusting impairment costs, the company generated earnings per share of 3 cents, in contrast with the Zacks Consensus Estimate of a loss of 39 cents per share.
Windstream Holdings, Inc. Price, Consensus and EPS Surprise
Total revenues increased 14% year over year to $1,497.9 million in the reported quarter, surpassing the Zacks Consensus Estimate of $1,488.4 million. Service revenues increased 15% to $1,477.3 million while Product revenues rose 3% to $20.6 million.
In the reported quarter, total operating expense was $3,287.2 million, up a whopping 166% year over year due to $1,840.8 million of goodwill impairment. Operating loss was $1,789.3 million compared with an operating income of $73.7 million in the prior-year quarter. Adjusted OIBDA (operating income before depreciation and amortization) was $357.4 million compared with $363.6 million in the year-ago quarter.
Cash Flow
In the fourth quarter of 2017, Windstream generated $325.3 million of cash from operations compared with $302.3 million in the prior-year quarter. Adjusted free cash flow was $47 million in the reported quarter.
Liquidity
Windstream exited 2017 with $43.4 million of cash and cash equivalents and $5,843.9 million of total debt compared with $59.1 million and $4,863.3 million, respectively, at the end of 2016.
Segment-Wise Information
Consumer & Small Business - ILEC: Total revenues were $481.8 million, down 5% year over year. Of the total, Services revenues were $475.9 million, down 25.2%. Product revenues totaled $5.9 million, down 32%. Total profit for the segment was $282 million, down 7%.
Consumer & Small Business - CLEC: Revenues totaled $51.4 million compared with a mere $3.5 million in the year-ago quarter. Segment profit was $27.5 million compared with $0.5 mllion in the prior-year quarter.
Wholesale: Revenues came in at $190 million, up 10% year over year. Segment profit was $116.4 million, down 7.9%.
Enterprise: Total revenues were $774.7 million, up 24% year over year. Of the total, Service revenues were $760.3 million, up 24%. Product sales were $14.4 million, up 27%. Total profit for the segment was $164.1 million, up 27% year over year.
Subscriber Statistics
As of Dec 31, 2017, the company had 1.2688 million household customers, down 6% year over year. High-speed internet customer base was 1.0066 million, down 4% while the digital TV customer base was 0.2779 million, down 13%. ILEC small business customers totaled 0.1281 million, down 8%. Enterprise customers were 0.1335 million, down 1% year over year. CLEC consumer customers were 0.6621 million compared with a mere 0.7 million in the year-ago quarter.
Outlook
For 2018, Windstream anticipates service revenues to improve slightly year over year. The company projects capital expenditure in the band of $750–$800 million. Adjusted OIBDAR is projected at around $1,950 – $2,010 million. Management expects to generate around $165 million of free cash flow in 2018.
Recent Development
Windstream will be enhancing its Cloud Connect solution by introducing a wide range of connectivity options for its cloud customers. Customers can choose any network connection from Windstream to create a dedicated, high-speed, vastly secure cloud-optimized network connection to major Cloud Service Providers including Amazon.com Inc.’s (AMZN - Free Report) Web Services, Microsoft Corp.’s (MSFT - Free Report) Azure, International Business Machines Corp.’s (IBM - Free Report) Bluemix, Google Cloud, Oracle Fast Connect and Salesforce.. Windstream carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Windstream (WIN) Q4 Earnings and Revenues Top Estimates
Windstream Holdings Inc. delivered impressive financial results in the fourth quarter of 2017. Both the top and bottom line outpaced the Zacks Consensus Estimate.
On a GAAP basis, the company reported net loss of $1,835.7 million or a loss of $10.26 per share compared with a net loss of $86.9 million or a loss of 94 cent per share in the year-ago quarter. However, after adjusting impairment costs, the company generated earnings per share of 3 cents, in contrast with the Zacks Consensus Estimate of a loss of 39 cents per share.
Windstream Holdings, Inc. Price, Consensus and EPS Surprise
Windstream Holdings, Inc. Price, Consensus and EPS Surprise | Windstream Holdings, Inc. Quote
Total revenues increased 14% year over year to $1,497.9 million in the reported quarter, surpassing the Zacks Consensus Estimate of $1,488.4 million. Service revenues increased 15% to $1,477.3 million while Product revenues rose 3% to $20.6 million.
In the reported quarter, total operating expense was $3,287.2 million, up a whopping 166% year over year due to $1,840.8 million of goodwill impairment. Operating loss was $1,789.3 million compared with an operating income of $73.7 million in the prior-year quarter. Adjusted OIBDA (operating income before depreciation and amortization) was $357.4 million compared with $363.6 million in the year-ago quarter.
Cash Flow
In the fourth quarter of 2017, Windstream generated $325.3 million of cash from operations compared with $302.3 million in the prior-year quarter. Adjusted free cash flow was $47 million in the reported quarter.
Liquidity
Windstream exited 2017 with $43.4 million of cash and cash equivalents and $5,843.9 million of total debt compared with $59.1 million and $4,863.3 million, respectively, at the end of 2016.
Segment-Wise Information
Consumer & Small Business - ILEC: Total revenues were $481.8 million, down 5% year over year. Of the total, Services revenues were $475.9 million, down 25.2%. Product revenues totaled $5.9 million, down 32%. Total profit for the segment was $282 million, down 7%.
Consumer & Small Business - CLEC: Revenues totaled $51.4 million compared with a mere $3.5 million in the year-ago quarter. Segment profit was $27.5 million compared with $0.5 mllion in the prior-year quarter.
Wholesale: Revenues came in at $190 million, up 10% year over year. Segment profit was $116.4 million, down 7.9%.
Enterprise: Total revenues were $774.7 million, up 24% year over year. Of the total, Service revenues were $760.3 million, up 24%. Product sales were $14.4 million, up 27%. Total profit for the segment was $164.1 million, up 27% year over year.
Subscriber Statistics
As of Dec 31, 2017, the company had 1.2688 million household customers, down 6% year over year. High-speed internet customer base was 1.0066 million, down 4% while the digital TV customer base was 0.2779 million, down 13%. ILEC small business customers totaled 0.1281 million, down 8%. Enterprise customers were 0.1335 million, down 1% year over year. CLEC consumer customers were 0.6621 million compared with a mere 0.7 million in the year-ago quarter.
Outlook
For 2018, Windstream anticipates service revenues to improve slightly year over year. The company projects capital expenditure in the band of $750–$800 million. Adjusted OIBDAR is projected at around $1,950 – $2,010 million. Management expects to generate around $165 million of free cash flow in 2018.
Recent Development
Windstream will be enhancing its Cloud Connect solution by introducing a wide range of connectivity options for its cloud customers. Customers can choose any network connection from Windstream to create a dedicated, high-speed, vastly secure cloud-optimized network connection to major Cloud Service Providers including Amazon.com Inc.’s (AMZN - Free Report) Web Services, Microsoft Corp.’s (MSFT - Free Report) Azure, International Business Machines Corp.’s (IBM - Free Report) Bluemix, Google Cloud, Oracle Fast Connect and Salesforce.. Windstream carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>