Windstream Q2 Profit Down - Quick Facts

(RTTNews) - Windstream Corp. (WIN) reported that its second-quarter net income decreased to $39.7 million or $0.06 per share, from $51.0 million or $0.09 per share in the same quarter last year.

GAAP results include approximately 1 cent in after-tax merger and integration and restructuring expense. Excluding these non-operational charges, adjusted earnings per share would have been 7 cents for the second quarter.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues and sales for the quarter declined to $1.506 billion from $1.534 billion in the prior year quarter. Eleven analysts had consensus revenue estimate of $1.51 billion for the quarter.

Overall consumer service revenues were $327 million, a decrease of 3 percent from the same period a year ago. Wholesale revenues in the second quarter were $151 million, a decline of 13 percent 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 revenues from declining consumer voice lines.

Windstream updated its financial outlook for the remainder of the year. The company now expects total revenue to decline 1 percent to 3 percent compared to 2012 largely due to a modestly softer business sales environment and continuing pressure in the carrier transport business. Fourteen analysts have consensus revenue estimate of $6.05 billion for fiscal 2013.

The company affirmed its previous guidance of expected adjusted OIBDA to range from a 3 percent decline to a 1 percent increase compared to the prior year.

Adjusted capital expenditures are expected to range from $815 million to $830 million, excluding $25 million in integration capital.

The company expects cash tax payments of $20 million and adjusted free cash flow between $860 million and $960 million, representing a dividend payout ratio of 61 percent to 68 percent.

Windstream also announced it is exploring the formation of a holding company to become the new publicly traded parent company of Windstream and its subsidiaries. The modified ownership design would enhance Windstream's corporate structure, strengthen its credit profile and provide greater financial flexibility. The revised corporate structure would mirror that of similar large companies.