LITTLE ROCK — Shares of Windstream Corp. fell to a three-year low Thursday after the company reported a 31.2 percent dip in its quarterly profit compared with the same period last year.
Windstream shares closed at $8.51 on the Nasdaq after dropping to $8.48 — the lowest shares have been since July 2009.
Shares have dropped about 9.7 percent since Wednesday’s close of $9.42. Trading volume was 35.05 million shares, compared with an average volume of 7.8 million.
The Little Rock-based communications company reported a net income of $53.7 million for the quarter, down from $78.1 million in 2011.
Earnings per share dropped from 15 cents in last year’s period to 9 cents this quarter. Excluding aftertax merger and restructuring costs, earnings per share would have been 12 cents and in-line with analyst predictions.
Jeffery Gardner, president and chief executive officer of Windstream, said he was surprised at the market’s response to the company’s earnings report.
“What we are doing at Windstream here is really transforming a business that is part of a journey that we have been on in the last five years,” Gardner said. “We are making great progress with that and at times the stock market isn’t as patient as we would like.”
Barry McCarver, an analyst for Stephens, Inc., said Windstream’s performance on the Nasdaq shows the comfort level with the company’s ability to pay a dividend is low.
While there is some concern that Windstream will lower its dividend, McCarver said he doesn’t think that will happen.
Gardner said cash flow has been flat, but it won’t prevent Windstream from making a dividend payment.
The company reported a $147 million dividend payout to its shareholders in the quarter.
For the nine months that ended Sept. 30, Windstream paid $440 million in dividends.
For the period, total revenue and sales for Windstream was $1.55 billion, up from $1.02 billion in 2011.
“Revenue came in well above my expectations,” Mc-Carver said. “All in all, a pretty good quarter.”
Revenue from consumer broadband service was $115 million, up 4 percent from the same period in 2011.
Costs and expenses for the period came to $1.3 billion compared to $745.9 million last year.
Windstream also completed a restructuring of its management in the period. The changes will result in an annual savings of about $40 million.
In May, Windstream said it would lay off between 375 and 400 workers in management positions nationwide. Of those, 31 were in Arkansas, including 25 in Pulaski County.
Windstream employs 14,500 people and has about 1,300 employees in Arkansas.
Business, Pages 27 on 11/09/2012