What happened

Shares of small-cap telecom Windstream (NASDAQ:WIN) fell 23% in May 2017, according to data from S&P Global Market Intelligence.

So what

Windstream reported first-quarter results on May 4, and it wasn't a pretty picture. Adjusted earnings fell to a net loss of $0.89 per share, down from roughly breakeven in the year-ago period. Sales declined by 6.7% year over year, landing at $1.52 billion. Both results fell short of Wall Street's expectations, pinned at a net loss of $0.26 per share on revenue near $1.54 billion.

It took a couple of days for the full force of this disappointing report to make its mark on Windstream's share price, but the damage was done. Windstream announced a number of network upgrades, partnerships, and other positive business news later in May but none of these could restore the stock price to April's levels.

Chart arrow drooping downward on top of shrinking coin stacks.

Image source: Getty Images.

Now what

Management did reaffirm their full-year guidance for service revenue, free cash flow, and adjusted income, which theoretically points to a strong second half of 2017 after the first quarter's misses. "First quarter was in line with our expectations," said Windstream CFO Bob Gunderman, "and we are making solid progress on achieving our 2017 goals."

So opportunistic turnaround investors might want to peck at Windstream's low, low share prices at this point, hoping for the company to deliver on Gunderman's promises in the second half. But if you're in that camp, keep in mind that Windstream's sales have been falling for three years while free cash flows recently dipped into negative territory and share prices slumped more than 70% lower. You'd be taking on a good deal of risk with this turnaround bet.

The best parts of Windstream arguably moved out with the spinoff of its network infrastructure operations under the communications sales and leasing banner, now known as Uniti Group. If you want a generous and sustainable dividend policy, backed by large cash flows, you should really be looking at Uniti these days.

Anders Bylund owns shares of Uniti Group. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.