LITTLE ROCK, Ark.—Windstream Corp., a local-phone company that's transforming itself into a business telecommunications provider, on Friday posted a 16 percent drop in net income for the third quarter, missing analyst estimates.
Shares of the Little Rock, Ark.-based company fell 93 cents, or 7.4 percent, to $11.60 in morning trading.
Its net income for the July-to-September period was $71.5 million, or 14 cents per share, down from $85.2 million, or 18 cents per share, in the same period last year.
Windstream said that excluding acquisition costs and a tax loss, earnings would have been 19 cents per share. Analysts polled by FactSet were on average expecting earnings of 20 cents per share.
Windstream's revenue was $1.023 billion, up 6 percent from a year ago thanks to the December acquisition of data-center operator Hosted Solutions LLC. Excluding the acquisition, revenue fell 1.4 percent as customers kept canceling phone lines.
Analysts had expected $1.031 billion in revenue.
Windstream is seeking to close on the acquisition of Fairport, N.Y.-based Paetec Holding Corp., which provides telecommunications services to businesses, before the end of the year. The deal is worth about $840 million at Windstream's current stock price.
Paetec shares fell 34 cents, or 6 percent, to $5.34 in morning trading, since Windstream is paying with stock.