Windstream reported encouraging results in the second quarter of 2015. The company's second-quarter loss was narrower than expected while revenues beat the Zacks Consensus Estimate.
Windstream offers broadband, telephony and digital TV services to consumers primarily in rural areas. It also provides advanced network communications such as cloud computing and managed services to business enterprises.
Windstream is gradually expanding its wave transport services with 100 Gbps data transmission speeds. The company aims to provide this service in 44 U.S. markets by the end of this year. The 100 Gbps network will also act as a long-haul backbone for last mile connection for both enterprise and carrier customers.
Notably, Windstream is currently focusing on optimizing its last mile network and cost cutting. For 2015, Windstream has selected five markets where it intends to create a meshed network around its existing network rings to provide last mile access. Management has decided to spend $25 million initially to increase its on-net fiber buildings in these markets.
At present, Windstream pays as much as $1 billion a year to local exchange carriers (ILEC) like AT&T, inc. T and Verizon Communications Inc. VZ in order to access wholesale networks to deliver services to multisite enterprise customers where the company does not own a last mile network. Thus, the company's latest initiative should bring in considerable savings.
In addition, we appreciate Windstream's focus on employing efficient executives to boost sales, cost-cutting initiatives and planned pricing initiatives, which are expected to drive revenues and margins. Investments made in data center and fiber expansion should boost revenues further in the coming quarters.
Moreover, the launch of a cloud-to-cloud disaster recovery management solution in Jun 2015 should bode well. The new solution replicates mission-critical virtual servers and data to provide an alternative to the cloud-based disaster recovery system.
Meanwhile, in Apr 2015, Windstream completed the tax-free spin-off of select telecommunication network assets to become an independent publicly traded real estate investment trust ("REIT"). The new company is known as Communications Sales & Leasing Inc. CSAL . In terms of infrastructural development, the streamlined Windstream aims to offer faster broadband speeds.
Moving ahead, we believe, the company is well positioned for long-term growth based on its investments in fiber-to-the tower and broadband networks as well as cost management.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.