NEW YORK (AP) -- Windstream Corp. shares rose Monday after the phone company dramatically reduced its outlook for 2013 tax obligations.
THE SPARK: Windstream said it now expects its 2013 tax obligations to total between $40 million and $50 million, down from a May prediction of about $250 million.
The company attributed the drop to the extension of a federal tax break approved by Congress and the White House last week, as well as other changes in the company's cash tax assumptions.
THE BIG PICTURE: The "fiscal cliff" tax deal includes the extension of a tax break that allows profitable companies to write off large capital expenditures immediately — rather than over time — giving some of them sizable tax shelters.
The tax break, known as bonus depreciation, benefits phone companies like Windstream, along with automakers, utilities and heavy equipment makers.
THE ANALYSIS: Citi analyst Michael Rollins backed his "Neutral" rating for the company. He expects Windstream shares to get a near-term boost from the expected positive effects of the tax breaks on the company's free cash flow this year.
THE SHARES: Up 35 cents, or 3.8 percent, to $9.67 in heavy afternoon trading, after peaking at $9.75 earlier in the day. Over the past 52 weeks, the stock has traded between $7.86 and $12.55.
Windstream shares tumbled in 2012, losing about 29 percent of their value.
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