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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