CenturyLink (NYSE:CTL, news, filings) and Windstream (NYSE:WIN, news, filings) each reported earnings this week. The two former primarily rural ILECs have each been evolving toward business services and the cloud, but for Q2 it was CenturyLink the market was happy with while Windstream took a hit.
CenturyLink turned in earnings per share of $0.65 excluding special items on revenues of $4.61B, both being slightly higher than composite analyst projections. They saw access line losses slow to 6.1% and a sequential boost to colo and managed hosting revenues of 5.8%. They also raised full year projections slightly to earnings of $2.45-2.55 per share and $18.3-18.4B in revenue. Operationally, they added fiber to 1,350 towers during the quarter for a total of 12,150 and another 2,000-3,000 on tap for the remainder of the year.
Meanwhile, Windstream met overall expectations with revenues of $1.54B and earnings per share of $0.12 after integration and restructuring costs. However, business services declined slightly sequentially to $893M, while wholesale revenues dipped to $214M due to the suspension of some PAETEC products. The PAETEC integration seems on-track, but at an earlier stage than with CenturyLink/Qwest/Savvis of course. It's just two quarters since the deal closed, and the PAETEC business wasn't growing much organically must surely churn slightly at first. I'm not sure what the ever-impatient market was expecting, but Windstream's transformation to a national ILEC/CLEC hybrid is necessarily going to take a while longer to truly bear fruit.