U.S. Markets closed

Windstream Secures $12M Deal

Zacks Equity Research

Windstream Corporation (WIN) – one of the largest U.S. rural local exchange carriers (:RLEC) – received orders worth $12 million from the U.S. Department of Veterans Affairs in Region 4. The area comprises 11 states in the northeastern U.S.

Windstream will offer its triple-play voice, data and Internet services for the U.S. Department of Veterans Affairs. The service contract will start by the end of this year and may extend up to five years totaling a value of $20 million.

The Veterans Affairs (:VA) department formed four geographic regions with multiple Veterans Information Service Networks. Moreover, each region will be assigned a single vendor in every region. Thus, Region 4 has been allotted to Windstream. Region 4 covers more than 300 VA facilities, including Veteran Affairs hospitals, clinics, cemeteries, and call centers, among others.

Windstream reported weak second-quarter 2013 results due to voice and digital television subscriber loss and reduced intrastate access rates. Both its top and bottom lines missed the Zacks Consensus Estimate. Voice lines and digital television customers witnessed a year-over-year decline of 5.5% and 4.9%, respectively, while high-speed Internet fell a marginal 1.3%.

Two months back, Windstream teamed up with Mitel to offer MiVoice and MiCollab cloud-based technologies for Windstream’s corporate clients. The company has also teamed up with LifeSize Communications, a division of  Logitech International SA (LOGI), to provide high definition (HD) video conferencing services to customers using Windstream's IP networking solutions.

Thus, we believe that such contract wins coupled with collaboration with firms will not only improve Windstream’s performance but also drive subscriber growth. This will provide Windstream a cutting edge over the other industry players, namely, Frontier Communications (FTR) and Consolidated Communications Holdings Inc. (CNSL).

Windstream currently carries a Zacks Rank #3 (Hold).

Read the Full Research Report on WINRead the Full Research Report on LOGIRead the Full Research Report on FTRZacks Investment Research