On Apr 3, we maintained our Neutral recommendation on
), reflecting a lucrative bundle of service offerings, an
expanding customer base and various strategic measures. However,
certain risk factors will limit the company's growth momentum in
the near to mid term.
Looking ahead, we believe that Windstream's focus on expanding
its service offerings to businesses with VoIP services, data
bundles, cloud and managed services; data center co-location;
fiber transport as well as increasing distribution channels will
lead to positive results. Little Rock, AR-based Windstream has
also revealed its plan to expand its Carrier Switched Ethernet
services across the nation.
The company is expected to register high profits in the coming
quarters on the back of its strong foothold across the nation
plus strategic growth across segments and a capital efficient
business model. The company also targets to trim its capital
spending in 2013, which will result in lower cash interest.
Planned investment for fiber-to-the-tower deployment, data center
expansion and enhancement of broadband network capability will
support incremental revenue. Additionally, Windstream has
implemented a number of measures to expand its business scale
that includes adding a number of data centers, employing
efficient sales people to boost the sales figure and render
greater customer satisfaction, as well as focusing on channel
However, the company's performance in the near term will likely
be under pressure owing to competitive pressure from other
Alaska Communications Systems
), constant upgrades in the technological scenario as well as
continued access-line erosion. Other headwinds for Windstream are
various federal regulations and issues as well as a highly
leveraged balance sheet.
For both the first and second quarters of 2013, the Zacks
Consensus Estimates for earnings are 11 cents, indicating a
respective year-over-year decline of 18.9% and 9.2%.
A stock within the telecom industry worth considering is
), which presently carries a Zacks Rank #2 (Buy).
ALASKA COMM SYS (ALSK): Free Stock Analysis
FRONTIER COMMUN (FTR): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
WINDSTREAM CORP (WIN): Free Stock Analysis
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