Is Windstream Holdings, Inc. (NASDAQ:WIN) A Valued Stock?

Boston, MA 05/16/2014 (wallstreetpr) – Windstream Holdings, Inc. (NASDAQ:WIN) reported declining revenues in its first quarter 2014 and lowers guidance for FY2014. But, the stock continues to shore high and last traded at $9.56.

Windstream’s overall revenues were $1.5 billion, a decline of 2% due to decreasing revenues from wholesale and consumer service segments. Excluding carrier services, the Company’s business services posted a flat growth YoY to $748 million.

Carrier revenue was down by 3% to $162 million due to the impact of decommissioning of legacy circuits for wireless carriers. But, the incurring losses were offset by solid growth in fiber-to-tower revenues. During the quarter, the Company added 95 towers to its total portfolio of 4,600 and expects to add 300 more into it.

But, the increasing sales of IP-based solutions and next generation data drove the Data and integrated services revenue by 3% YoY to $414 million and Data center & managed service’s revenue by 23% to $30 million. The growth in business services segment was due to increasing enterprise customers. Enterprise customer locations grew by 3% and average revenue per business customer also increased by 8% YoY.

On the other end, Consumer revenue decreased by 4% to $313 million despite 2% YoY increase in retail broadband services. Lower interstate access and lesser usage reduced the switched access revenue; subsequently, it decreased the Wholesale segment revenue by 7% to $142 million.

Windstream Holdings, Inc. (NASDAQ:WIN) expects moderate growth in coming quarters; therefore, it updated the revenue guidance within a range of 2.5% decline to 1% increase in FY2014.

Lower segment revenues along with increasing costs of services and SG&A expenses generated adjusted OIBDA of $540 million (1Q2013: $586.3 million) that compressed the margin to 37%. Accordingly, the Company reduced its investment for fiber-to-tower, so, its adjusted capital expenditures in 1Q2014 were $153 million that increased the adjusted free cash flow by 27% YoY to $314 million.

In FY2014, Windstream Holdings, Inc. (NASDAQ:WIN) expects adjusted capital expenditures of $800-$850 million so to make an adjusted free cash flow of $775-$885 million. In addition, the Company guided for dividend payout ratio for the year at range of 68-78%.

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Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing.

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