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Windstream (WIN) Swings To 4Q Profit, Yet Misses Estimates

 February 19, 2013 07:47 AM

(By Balaseshan) Windstream Corp. (NASDAQ: WIN), a provider of advanced communications services, swung to a quarterly profit due to higher revenue. However, on a pro forma basis, results missed Street's expectations.

Earnings were $10.1 million or $0.02 per share for the fourth quarter, compared to a loss of $34.7 million or $0.07 per share last year. Excluding items, adjusted earnings per share would have been 11 cents for the latest quarter.

Revenue jumped 28% to $1.538 billion, while on a pro forma basis total revenue declined 2% year-over-year.

Analysts, on average, polled by Thomson Reuters had expected a profit of $0.13 per share on revenue of $1.55 billion for the fourth quarter.

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On a pro forma basis, business service revenues rose 3% to $917 million, while consumer broadband service revenues increased 5% to $116 million. Overall consumer service revenues decreased 1.5% to $334 million.

Business and consumer broadband revenues represented about 70% of Windstream's total revenues and sales in the quarter and collectively rose 2% year-over-year.

Wholesale revenues were $169 million, a decline of 17% from the same period a year ago, due to lower intrastate access rates as part of intercarrier compensation reform implemented in July 2012 and lower switched access revenue from declining consumer voice lines.

Windstream expects growth in business revenue and consistent trends in consumer revenue to largely offset declines in wholesale revenue such that total revenue in 2013 is within a range of a 2% decline to a 1% rise as compared to last year.

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Capital expenditures are expected to decline by more than $200 million in 2013 and be between $800 million and $850 million. Windstream expects adjusted free cash flow to increase between 13% and 25% from 2012, resulting in a dividend payout ratio ranging from 61% to 68%.

WIN closed Friday's regular session down 1.71% at $8.93. The stock has been trading between $7.86 and $12.55 for the past 52 weeks.

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