Rural telecom Windstream
The bar isn't set terribly high this time. Earnings are expected to drop 26% year over year to $0.14 per share. Analysts look for sales to surge 52% to $1.6 billion, but do keep in mind that Windstream spent $2.4 billion to acquire broadband service provider PAETEC last summer. Comparing this year's combined Granny Smith apples to last year's separately operating Braeburn, management expects total revenues to stay roughly flat throughout 2012.
That deal was part of a huge consolidation wave sweeping across the telecom industry. Only months before the PAETEC announcement, CenturyLink
Look for an update on the PAETEC integration in this report. If the combination is going smoothly, Windstream might actually surprise the Street for once.
More to the point, keep an eye on updates to Windstream's cash-flow guidance. Management has set its sights on roughly $900 million of free cash flows in 2012, with a dividend payout ratio comfortably below 70%. You don't want to see cash flows adjusted downward or the payout ratio going up. Frontier Communications
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