Windstream Earnings Call Nuggets: Small Enterprise Business and Incremental Synergies

| + More Articles
  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

Windstream Corp (NASDAQ:WIN) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Small Enterprise Business

Frank Louthan – Raymond James & Associates: So, looking at a couple of the declines in the metric, can you give us a little bit of color on sort of the trends there in the small enterprise business. What’s – can you give us a little bit color on what’s exactly the makeup of those smaller business customers, are they mostly resale? And where do you think the satellite customers are going as you are losing that – some of those customers and are they sort of – is that pressuring some of the broadband ads as well, I mean, you’ve got very high penetration, and it makes some sense, but just curious where you see that and where do you see the erosion in those categories stopping?

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Brent K. Whittington – COO: Frank, this is Brent. I’ll take that and start maybe with the business side on the small biz. A couple things going on there. If you look at enterprise, we’re seeing really nice growth there and that’s greater than the 750 a month where we’re growing at almost 7%. And as I kind of mentioned, what we’ve got going on there is our account managers are focused on moving customers up in terms of revenue. So, we do have a chunk of that growth that’s coming from small biz that’s migrating into that enterprise category, and then to your point, a lot of where we’re seeing the losses on the small biz is in those CLEC markets where it’s tougher for us from a distribution standpoint just simply because of the fact that our enterprise (builds) and sales force is largely focused these days on deals that exceed 750 a month to make that up in distribution. In that channel, specifically in CLEC markets, our focus is primarily on more direct mail, telemarketing, selling to our base and retention where we’re seeing great trends in terms of churn improving year over year, but it’s really a distribution issue, Frank, and more in line with our field sales force in those CLEC markets focused on larger deals than that. In our ILEC markets, to be specific, we still have a dedicated small business sales team. So we count on much more than just our call centers as well. And maybe the last point I’d make on that, definitely that’s a competitive space in both ILEC and CLEC, but just simply because the margins that we can make in the ILEC are much easier for us to afford that expanded distribution than it is in the resell CLEC markets where we do have lower margins there. On the consumer side, maybe as it pertains to video, I think it really is a function of the tremendous success we’ve had over the years selling DISH. We have phenomenal penetration, greater than 20% and there’s nothing I’d say going on there. In fact during the quarter we had a promotion that was focused on DISH included in our package with our bundle, but simply we just sold that extensively over the years. And as we got a larger base, we had to continue to outrun churn with new adds and we just didn’t do that in the quarter.

Frank Louthan – Raymond James & Associates: And with the broadband is that – what’s the typical profile of customer that’s leaving? Is it very low speed? Is it single play? Are they correlated with the defections on the satellite side?

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business