NEW YORK (TheStreet) -- Shares of Windstream Holdings (WIN) are down 6.93% to $8.73 after naming a new chief financial officer, less than a day after Tony Thomas was appointed CEO, a change that could postpone the company's plan to spin off its telecommunications network assets into an independent real estate investment trust, according to Raymond James, Bloomberg reports.
Windstream President and CEO Tony Thomas today announced that Bob Gunderman has been named CFO, a day after Thomas took over for Jeff Gardner as CEO, after serving as the company's president of real estate investment trust (REIT) operations.
The telecommunications services provider, which focuses on residential and business customers in rural communities in the U.S., has underperformed, down more than 14% since its third quarter earnings miss, as subscriber results continued to be largely below expectations, according to Nomura.
"Subscribers have now fallen (3.5%) year over year while consumer voice lines fell (6.4%), a decline that also continues to accelerate," Nomura analyst Adam Ilkowitz said in a note.
Separately, TheStreet Ratings team rates WINDSTREAM HOLDINGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate WINDSTREAM HOLDINGS INC (WIN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, WINDSTREAM HOLDINGS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- The gross profit margin for WINDSTREAM HOLDINGS INC is rather high; currently it is at 51.23%. Regardless of WIN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.54% trails the industry average.
- WIN, with its decline in revenue, slightly underperformed the industry average of 0.9%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has significantly decreased by 73.8% when compared to the same quarter one year ago, falling from $30.60 million to $8.00 million.
- The debt-to-equity ratio is very high at 18.87 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, WIN has a quick ratio of 0.52, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: WIN Ratings Report