Windstream Holdings Inc. (NASDAQ: WIN) Post Strong dividends but Fall Short of Market Expectations
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Windstream Holdings Inc. (NASDAQ: WIN) posted results for the third quarter of 2014, before stock market trading initiated on Wednesday. Windstream Holdings Inc. (NASDAQ: WIN) managed to make $0.03 adjusted diluted earnings per share. The company’s revenue for the quarter came out to be $1.46 billion. The communication giant made 0.08 EPS upon revenue of $1.50 billion last year, in the same quarter. The company almost managed to meet the market estimate of 0.04 EPS and $1.47 billion revenue. The quarter figures are not the best generated by the company.
Windstream Holdings Inc. (NASDAQ: WIN) reported 0.01 dollar earnings per share and $1.46 billion revenue. Adjusted EPS lost two cents, owing to tax and reconstructing charges. Last July, the company decided to put some of its telecommunications assets into publicly traded real estate investment trust.
Windstream Holdings Inc. (NASDAQ: WIN)’s earnings weren’t promising, but they were good enough to ensure good dividend yields. Quarterly dividends are 0.25 dollar, with the dividend yield firm at 9.6 percent. The company’s CEO is optimistic about the future of the company. He stated that Windstream Holdings Inc. (NASDAQ: WIN) pulled off another good quarter, and has generated good numbers with strong dividend yield. The company is driven by its accelerated customer growth, and its growing average revenue per customer.
Windstream Holdings Inc. (NASDAQ: WIN) accumulated $253 million free cash flow due to cash interest savings and lower capital expenditures. The yearly cash flow amounted to $693 million. This is 2% more than last year’s free cash flow. The company is strong on dividends, as it returned $452 million to stockholders in the first nine months.
EPS and revenue might have come a bit short, which can be consequential to the company’s share price on the market. But investors fancy the sort of stock that can bring them high payoff from dividends; in that case Windstream Holdings Inc. (NASDAQ: WIN) is a success, but a risk taker of the highest caliber. Windstream Holdings Inc. (NASDAQ: WIN) stock price toppled down to 10.32 in Thursday’s premarket. The target price set by the market was $11.20, which the company couldn’t meet.
Windstream Holdings Inc. (NASDAQ: WIN)’s success might be solely based on its dividends but the company can’t go on like this if it wishes to produce high profits in the long run. The stock price is constantly declining, and investors would eventually realize that Windstream Holdings Inc. (NASDAQ: WIN) is running on borrowed time. However, we have to give credit for sustaining healthy dividends for the shareholders, even though the EPS and revenue came short of expectations.
In order to sail smoothly, Windstream Holdings Inc. (NASDAQ: WIN) will have to make its ship formidable, by becoming a company that is capable enough to post good earnings per share and healthy revenue. Strong dividends are backed by strong profits. Waning profit means dividends will dwindle down with the passage of time and investors aren’t really known to be risk takers, they’ll start dumping the stock cheaply.