Voice and data network service provider Windstream Holdings (NASDAQ:WINMQ) reported results for the third quarter this morning. The numbers came up short of Wall Street's targets, and Windstream shares fell more than 5% in Thursday's morning session.

Windstream's sales fell 2.9% year over year to $1.46 billion. Adjusted to exclude restructuring costs and other one-time items, earnings per share declined from $0.08 to $0.03. Analysts were looking for adjusted earnings of $0.04 per share on $1.47 billion in total sales, so Windstream delivered a near-miss on both counts.

Image source: Windstream.

Service bundles and high-speed Internet packages helped Windstream grow its consumer broadband sales by 1.4%. In the business-class division, Windstream saw average revenue per customer increase by 10% as the company moves upmarket and serves a larger number of big enterprise customers.

However, this focus on higher-value business sales is eroding Windstream's sales to small and medium businesses. The number of small business accounts fell 32% year over year. The net result of fewer customers and growing account sizes was a 0.7% increase in total sales. Management called it a "slight" increase.

Full-year guidance figures were left unchanged, including a sales projection slightly above the current analyst view.

The spinoff of Windstream's network assets into a real estate investment trust, or REIT, structure continues apace. The company has filed all necessary paperwork with the SEC, and is obtaining approvals from the public utility commissions in each affected state.

The spinoff should be completed in the first quarter of 2015, assuming all required regulatory approvals drop in by then.

Windstream's 5% share price drop brings the stock back to a level not seen since June, before the company unveiled its ambitious REIT reorganization plan. The stock still beats the market in 2014, having gained 24% year to date.

Separately, Windstream announced its next dividend last night. The quarterly payout held steady at $0.25 per share, and is scheduled for delivery on Jan. 15 to stockholders of record as of Dec. 31. Windstream's dividend has remained at this exact level since January 2007, making this the 32nd straight $0.25 payout per share. That creates a dividend yield of 9.5% at yesterday's closing price.

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