Uniti Earnings: Results Were Solid, but Skepticism About Windstream Merger Continues to Drive Stock

Uniti’s second-quarter results were steady as usual, as master lease agreements dominate the business and carry predetermined revenue and profits to a great extent. Bookings for new leases were especially strong and offer encouragement for future growth prospects, though these other leases make up a small part of Uniti’s business, as currently comprised. However, uncertainty surrounding what impact the pending merger with Windstream will have on the future corporate structure and operating prospects continues to be much more consequential than Uniti’s results, and we are maintaining our $4 fair value estimate.