Windstream (NASDAQ:WIN) now expects 2014 revenue growth to be at the low end of a prior guidance range of -2.5% to +1%; consensus is for a 1.9% decline. Also, capex guidance has been cut to $775M from $800M-$850M.
Adjusted free cash flow guidance of $775M-$885M and dividend payout ratio guidance of 68%-78% is affirmed.
Q3 enterprise/small business service revenue rose slightly Y/Y to $752M, with Internet and data center service growth offsetting voice declines. Consumer revenue fell 0.3% to $321M; 1.4% broadband growth and service bundle uptake offset voice declines.
Carrier revenue fell 10% to $151M, as wireless carriers abandoned Windstream's TDM (i.e. T1/T3) circuits in favor of Ethernet networks. Wholesale revenue fell 11% to $132M due to rate cuts.
Business customer locations fell by 5.3K Q/Q to 580.7K. Consumer voice lines fell by 30K to 1.64M, consumer broadband lines by 9K to 1.14M, and digital TV customers by 4K to 390K. Carrier special access circuits fell by 4.2K to 84.3K.
Windstream's anticipated telecom network REIT spinoff is expected to occur in Q1 2015.
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