Windstream Holdings Inc. WIN reported mixed financial results in the second quarter of 2017. While net loss was narrower than the Zacks Consensus Estimate, revenues fell below the same.
On a GAAP basis, the company reported net loss of $68.1 million or a loss of 37 cents per share compared with a net income of $1.5 million or 1 cent per share in the year-ago quarter. Windstream's quarterly loss per share of 37 cents was narrower than the Zacks Consensus Estimate of a loss of 45 cents.
Total revenue increased 10% year over year to $1,491.6 million in the reported quarter, missing the Zacks Consensus Estimate of $1,499 million. Service revenues increased 10% to $1,465.6 million while Product revenues declined 8% to $26 million.
In the reported quarter, total operating expense was $1,384.8 million, up 15% year over year. Operating income was $106.8 million compared with $154.6 million in the prior-year quarter. Adjusted OIBDA (operating income before depreciation and amortization) was $336.9 million, down a substantial 38.3% year over year although it improved sequentially by $1.6 million.
In the second quarter of 2017, Windstream generated $221.2 million of cash from operations compared with $297.3 million in the prior-year quarter. Adjusted free cash flow was a negative $23.3 million in the reported quarter.
Windstream exited the second quarter of 2017 with $24.7 million of cash and cash equivalents and $5,579.2 million of total debt compared with $59.1 million and $4,863.3 million, respectively, at the end of 2016. At the end of the reported quarter, the debt-to-capitalization ratio was 0.90 compared with 0.97 at the end of 2016.
Consumer & Small Business - ILEC: Total revenue was $387.2 million, down 2% year over year. Of the total, Consumer revenues were $308.8 million, down 0.7%. Small Business - ILEC revenues totaled $78.4 million, down 6.9%. Total profit for the segment was $212.4 million, down 3.7%.
Consumer & Small Business - CLEC: Revenues totaled $193.1 million, down 18.4% year over year. Segment profit was $72.1 million, down 23.6%.
Wholesale: Revenues came in at $176 million, down 7.9% year over year. Segment profit was $116.4 million, down 7.9%.
Enterprise: Total revenue was $574.9 million, down 4.7% year over year. Of the total, Service revenues were $563.9 million, down 4.2%. Product sales were $11 million, down 24.1%. Total profit for the segment was $102.8 million, flat year over year.
As of Jun 30, 2017, the company had 1.3078 million household customers, down 6.8%. High-speed internet customer base was 1.0258 million, down 4.6% while the digital TV customer base was 0.3007 million, down 12.1%. ILEC small business customers totaled 0.1303 million, down 7.6%. Enterprise customers were 0.0346 million, down 4.4% year over year. CLEC consumer customers were 0.6497 million, down 4.9% and CLEC small business customers were 0.0900 million, down 20.5%.
Windstream Holdings, Inc. Price, Consensus and EPS Surprise
Windstream Holdings, Inc. Price, Consensus and EPS Surprise | Windstream Holdings, Inc. Quote
For 2017, Windstream expects total service revenues to be inline with full year 2016. The company projects capital expenditure in the band of $790-$840 million. Adjusted OIBDAR is anticipated at around $2,020 - $2,040 million. Management expects to generate around $200 million of free cash flow in 2017.
In Apr 2017, Windstream entered into a $228 million deal to acquire Broadview Networks, a leading provider of cloud-based unified communications solutions to small and mid-sized businesses (SMBs). If the deal finally materializes, it will enable the company to achieve economies of scale to compete with CenturyLink Inc. CTL , NII Holdings Inc. NIHD and Frontier Communications Corp. FTR . Windstream has a Zacks Rank #5 (Strong Sell). However, all other stocks mentioned above, carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CenturyLink, Inc. (CTL): Free Stock Analysis Report Windstream Holdings, Inc. (WIN): Free Stock Analysis Report Frontier Communications Corporation (FTR): Free Stock Analysis Report NII Holdings, Inc. (NIHD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research