Windstream rating at risk?
Windstream Corp., the landline telecommunications company spun off from Alltel Corp. with operations in Hudson, could be putting its junk bond ratings at risk for downgrades by sticking with a 13 percent stock dividend while limiting capital outlays.
The company, whose Ba2 grade from Moody’s Investors Service is on review with a negative outlook, has a leverage ratio of 3.91, the highest among its industry in the same ratings tier, according to data compiled by Bloomberg News. It will seek “opportunities” for leasing network capacity from rivals to improve service for its fast-growing segment that serves businesses, Chief Financial Officer Tony Thomas said at a JPMorgan Chase & Co. conference in Miami on Feb. 27.
Windstream is turning to leasing, which has narrower profit margins than building its own network, because of cash constraints after its $2.3 billion acquisition of Paetec Holding Corp. in 2013, said Mark Stodden, a Moody’s analyst in New York. The company is keeping capital spending below the industry average of 15 percent of sales while paying 87 percent of its free cash flow as a dividend to maintain the $1 per share it’s distributed annually since 2006.
Mortgage rates up slightly
Mortgage buyer Freddie Mac said the average rate for the 30-year fixed loan rose to 3.57 percent from 3.54 percent last week. That’s near the 3.31 percent reached in November, which was the lowest on records dating to 1971.
The average rate on the 15-year fixed mortgage increased last week to 2.76 percent from 2.72 percent last week. The record low of 2.63 percent was also reached in November.
New smartphone at AT&T
AT&T says it will start taking pre-orders for the Samsung Galaxy S 4, the season’s most eagerly awaited smartphone, on April 16 for $250.
The amount is $50 above the usual introductory price for high-end smartphones.
AT&T didn’t say when the phone will go on sale in stores, or when the pre-orders will be delivered, but pre-orders usually start a week or two before deliveries.
The S 4 is the successor to the Galaxy S III, which has been the biggest competitor to Apple’s iPhone. AT&T is the first U.S. carrier to announce a price and pre-order date, but others have said they’ll sell the phone.
The Galaxy S 4 comes with a slightly bigger screen, a larger battery and a faster processor.
BlackBerry reports profit
BlackBerry, which is attempting a comeback with a new lineup of smartphones, reported a surprise profit in the fourth quarter after embarking on a cost-cutting program last year, even as sales continued to trail projections.
Excluding some costs, profit was 22 cents in the period, the Waterloo, Ontario-based company said in a statement. That compared with an average estimate for a loss of 30 cents a share, according to data compiled by Bloomberg. The company said it expects to “approach break-even financial results” this quarter as well, defying predictions for another loss.
Amazon buys book site
Amazon.com Inc., the world’s biggest online retailer that got its start in bookselling, has agreed to buy book recommendations site Goodreads. Financial terms were not disclosed.
Goodreads serves as a social network for bookworms with 16 million members and was founded in 2007.
Compiled from staff and wire reports