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Windstream Reports Financials, Talks Digital Transformation

February 23, 2018

Digital transformation is upon us. Businesses are shifting and changing in light of the new always-connected customer and the fact that cloud-based newcomers have disrupted markets. And companies like Windstream are stepping up to help enable organizations that aren’t digital natives to adapt to this new world.

In announcing its 2017 financials this week, Windstream laid out how it will help businesses with digital transformation in the year ahead. It also noted that in 2017 it saw growing demand for its SD-WAN service and strategic enterprise products. And it talked about its 2017 acquisitions and network investments.

Windstream’s 2017 fourth quarter and full year earnings and revenues topped estimates by Zacks Equity Research. And Windstream stock traded on unusually high volume yesterday. But, the stock closed down on Thursday. And while 2017 financials at Windstream were better than expected, there were still losses.

For example, Windstream:

• reported a net loss of $1.84 billion (compared to a net loss of $87 million a year ago),

• said that total revenues and sales were $5.85 billion last year, and that total service revenues were $5.76 billion,

• had an operating loss of $1.6 billion (compared to operating income of $515 million in the same period a year ago), and

• revealed its adjusted revenues and sales were $1.50 billion in the fourth quarter (a decline of 3 percent from the same period a year ago, and a year-over-year decline of 6 percent).

The company’s stock closed at $1.30 yesterday, down 12.75 percent. However, in discussing Windstream, reported the following: “Generally speaking, when a stock experiences a sudden spike in trading volume, it may be seen as a bullish signal for investors. An increase in volume means more market awareness for the company, potentially setting up a more meaningful move in stock price.”

Yesterday, Windstream also reported this clearly positive news, noting it has:

• improved its balance sheet,

• reported its twelfth consecutive quarter of consumer ARPU growth,

• expanded its enterprise contribution margin percentage, up 200bps sequentially and 160bps year over year, and

• ended the year with the highest adjusted OIBDAR margin level since before the EarthLink deal.

In 2017, Windstream completed its acquisitions of EarthLink and Broadview. And it launched its OfficeSuite and SD-WAN Concierge.

The EarthLink deal, which closed a year ago this month, expanded Windstream’s national fiber footprint. It also enabled Windstream to expand what it offers in the way of cloud connectivity, managed services, network security, SD-WAN, and UCaaS offerings. Windstream completed its Broadview acquisition in July. This deal brought the unified communication OfficeSuite solution into the fold. Windstream says OfficeSuite is a great complement to its SD-WAN offering.

"For 2018 we are focused on advancing our industry-leading Enterprise and Wholesale service capabilities and launching faster, more cost-effective broadband deployment techniques,” said Windstream President and CEO Tony Thomas. “We will further simplify our business and transform customer-facing and internal tools and drive revenue improvements through enhanced sales and improved customer retention. We also will continue our work to optimize our balance sheet."

At ITEXPO last week, Windstream debuted new Windstream Enterprise and Wholesale brands. The company said this effort reflects its position as a digital transformation enabler.

Edited by Mandi Nowitz

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