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It’s been an eventful few days for Windstream Holdings Inc. of Little Rock, which has been working through Chapter 11 bankruptcy since February 2019.
U.S. Bankruptcy Court Judge Robert Drain approved its previously announced lease settlement agreement with spinoff Uniti Group Inc. of Little Rock on Friday, and the company released its earnings on Monday.
For the first quarter of 2020, Windstream reported a loss of $78.7 million, or $1.84 per share, which was much improved from a loss of $2.31 billion, or $54.26 per share, in the same quarter of last year.
Revenue was $1.2 billion, down from $1.32 billion, and those results missed Wall Street expectations by $40 million.
“Windstream overcame unprecedented conditions resulting from the coronavirus pandemic to deliver solid results in the first quarter. Our network continues to perform well, primarily due to our past network investments and modernization efforts, even as usage has increased significantly in recent weeks,” CEO Tony Thomas said in a news release.
“I want to thank our Windstream team for remaining focused on our customers and for tirelessly providing essential telecommunications services during this challenging time,” he continued. “Our flat sequential first-quarter adjusted OIBDAR level demonstrates not only our continued focus on expense reduction efforts, but also strong and increasing demand for our consumer broadband products, which drove sequential revenue improvement in our Kinetic business. We also continued to see healthy demand for our Enterprise strategic products and services in the quarter.”
Windstream pays Uniti about $659 million per year for access to telecommunications infrastructure and other assets that power its business.
The agreement the judge approved calls for Uniti to invest $1.75 billion in the network so that Windstream can deliver 1-gigabit-per-second speeds to more than half its Kinetic footprint.
Uniti also will pay Windstream about $490 million and purchase certain unused and underused dark fiber assets from Windstream for an additional $285 million.
The agreement resolves pending litigation between the two companies and keeps Windstream on course to emerge from bankruptcy as early as this summer, according to the release.
Windstream filed its reorganization plan with the court on April 1. That plan would reduce its debt by more than $4 billion.
During the quarter, Kinetic service revenue was $505 million, down from $514 million in the same period a year ago. Enterprise service revenue was $590 million, down from $696 million. Wholesale service revenue was $85 million, down from $93 million.
Still, the company touted growth in its Kinetic broadband customer base for the eighth consecutive quarter, and said it added about 18,000 new broadband subscribers in the quarter.