Windstream reports fourth-quarter, full-year 2016 results
Achieved financial guidance provided for 2016
Grew enterprise revenue and significantly expanded enterprise contribution margin
Release date: March 1, 2017
LITTLE ROCK, Ark. - Windstream Holdings, Inc. (NASDAQ: WIN), a leading provider of advanced network communications and technology solutions, today reported fourth-quarter and full-year 2016 results.
“Our 2016 results demonstrate continued progress executing our focused operational strategy. We achieved the financial guidance provided for 2016, delivered consistent results across our core business units and returned value to shareholders through our dividend,” said Tony Thomas, president and chief executive officer at Windstream.
“We grew enterprise service revenue for the year and significantly expanded enterprise contribution margin by $78 million or 32 percent. We expanded the availability of premium broadband speeds and rolled out 1 Gigabit service in four markets, which led to improved consumer trends. We expanded our metro fiber network and fixed wireless service in key cities and extended our fiber transport network throughout the western United States to provide increased sales opportunities. Additionally, we laid the groundwork for the launch earlier this year of software-defined wide area network solutions, or SD-WAN, a technology that will transform how businesses design and manage their networks.
“Our 2017 priorities build on the advancements in 2016. Our EarthLink merger integration planning is progressing well, and we expect to achieve $150 million in annual synergies within three years, exceeding our original expectations by $25 million. We will deliver improved consumer trends as we deliver faster broadband speeds to more customers. We will drive continued growth in enterprise contribution margin in 2017. And we will continue to leverage next generation technology, such as SD-WAN, to drive sales and improve the customer experience,” Thomas said.
Results under GAAP
For the fourth quarter, total revenues and sales were $1.31 billion and total service revenues were $1.29 billion compared to $1.43 billion and $1.39 billion respectively year-over-year. Operating income was $74 million compared to $132 million in the same period a year ago. The company reported a net loss of $87 million or a loss of 94 cents per share compared to net income of $141 million or $1.41 per share a year ago. Fourth-quarter 2016 results include a pre-tax expense of $61 million related to the company’s pension plan. This non-cash charge resulted from a decrease in the discount rate used to measure the company’s pension obligations. Additionally, the company’s fourth-quarter 2015 results included the sale of the company’s data center business.
For 2016, total revenues and sales were $5.39 billion and total service revenues were $5.28 billion compared to $5.76 billion and $5.60 billion respectively year-over-year. Operating income was $515 million compared to $509 million in the same period a year ago. The company reported a net loss of $384 million or a loss of $4.11 per share compared to net income of $27 million or 24-cents per share a year ago.
Adjusted Results of Operations
Adjusted revenues and sales were $1.31 billion in the fourth quarter, a decline of 6 percent from the same period a year ago, and $5.39 billion for the year, a decline of 4 percent year-over-year.
Adjusted service revenues were $1.29 billion in the fourth quarter, a decrease of 5 percent year-over-year, and $5.28 billion for the year, a decline of 3 percent year-over year.
Adjusted OIBDAR was $482 million in the fourth quarter, a decrease of 4 percent year-over-year, and $1.91 billion for the year, a decline of 5 percent from the same period a year ago.
Consumer and small business ILEC service revenues were $392 million in the fourth quarter, a decrease of 1 percent from the same period a year ago, and $1.58 billion for the year, a decline of 1 percent from 2015. Contribution margin was $233 million or 60 percent in the fourth quarter, an increase of $21 million or 10 percent sequentially, and $899 million or 57 percent for the year. Consumer average revenue per household increased in the fourth quarter for the eighth quarter in a row and more than 6 percent year-over-year driven by broadband speed penetration gains across all tiers and sales of bundled services.
The following information was filed by Windstream Holdings, Inc. (WIN) on Wednesday, March 1, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.