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Windstream (WIN) 3Q Earnings Drop 31 Pct, Misses Estimates

 November 08, 2012 09:53 AM

(By Balaseshan) Windstream Corp. (NASDAQ: WIN) fell more than 9% in early trade after the provider of advanced communications services reported a 31% drop in quarterly earnings due to higher costs and expenses, missing market expectations.

Earnings were $53.7 million or $0.09 per share for the third quarter, down from $78.1 million or $0.15 per share last year. Excluding items, adjusted earnings per share would have been 12 cents for the third quarter.

Revenue jumped 52% to $1.55 billion, while on a pro forma basis total revenue declined 0.8% year-over-year.

Analysts, on average, polled by Thomson Reuters had expected a profit of $0.13 per share on revenue of $1.54 billion for the third quarter.

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On a pro forma basis, business service revenues rose 3% to $906 million, while consumer broadband service revenues increased 4% to $115 million. Overall consumer service revenues decreased 3% to $335 million.

Business and consumer broadband revenues represented about 69% of Windstream's total revenues and sales in the quarter and collectively rose 2.7% year-over-year.

Wholesale revenues were $220 million, a decline of 10% from the same period a year ago on a pro forma basis and in line with expectations.

Windstream completed a restructuring of its management organization in the third quarter, simplifying its operating model to better serve customers. The reorganization will result in annualized savings of about $40 million.

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Additionally, the company has achieved a run rate of $60 million in operating synergies through the third quarter and is on track to achieve $100 million in total by the end of 2014 related to the acquisition of PAETEC.

WIN is trading down 9.34% at $8.54 on Thursday. The stock has been trading between $9.00 and $12.55 for the past 52 weeks.

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