Windstream (WIN) has made several investments into the cloud computing market to expand its geographic reach outside of the U.S. Frontier Communications (FTR) has made several investments into customer service hubs in several states. Each has made expenditures to enhance customer service and ensure customer retention and preserve market share. Let’s have a look at how these acquisitions are affecting the performance of each company.
Windstream’s common shares trade around $11.20, have a 52 week range of $13.57 and $10.76. The shares have a price earnings multiple of 34.04, earnings per share of $0.33 and a dividend yield of 8.80%. Windstream has total cash of $227 million and total debt of $9.27 billion. Its book value per share is $2.56. Market capitalization is $6.57 billion.
Windstream’s fourth quarter 2011 showed a 0.7% increase in revenue over the same period in 2010. Revenues from business were up 2.5% from the fourth quarter 2010. Broadband revenues were up 7% from the same period in 2010. Business and consumer broadband accounted for approximately 67.4% of Windstream’s revenues in the 2011 fourth quarter.
The decrease in the earnings per share from $0.66 in 2010 to $0.33 for the full year in 2011 is attributed to a change in the accounting methods for pensions, after tax charges related to mergers and acquisitions and losses related to the early retirement of outstanding debt. The dividend cash payout was 65% of $782 million of free cash flow in 2011. Dividend payouts are expected to be 62% to 70% of cash flow in 2012. Free cash flow is expected to be between $840 million to $950 million in 2012.To continue reading, click here.