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Frontier Communications (FTR) Reports In-Line Loss in Q3
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Frontier Communications Corp. reported mixed financial results in the third quarter of 2016. The company’s adjusted net loss was in line with the Zacks Consensus Estimate but revenues fell short of the same.
On a GAAP basis, net loss in the reported quarter was $134 million or a loss of 12 cents per share compared with a net loss of $81 million or 7 cents per share in the prior-year quarter. However, quarterly adjusted (excluding special items) loss per share was 4 cents, in line with the Zacks Consensus Estimate.
Total revenues increased a whopping 77.2% year over year to $2,524 million. The significant jump in revenues can primarily be attributable to the acquisition of certain wireline assets from Verizon Communications Inc. (VZ - Free Report) . However, the figure lagged the Zacks Consensus Estimate of $2,561 million.
Segment-wise, Customer revenue totaled $2,319 million, up a substantial 89.6% year over year while Switched access and subsidy revenues were $205 million, inching up 2% year over year. Within the Customer segment, voice services revenue totaled $809 million, climbing 61.8%, Data and Internet services revenues came in at $1,045 million, advancing 77.4%; video revenues were $392 million, soaring an astounding 452.1% and Other revenue totaled $73 million, up 15.9%. Category-wise Residential revenues were $1,272 million, up a massive 109.9% while Business revenues came in at $1,047 million, up 69.7%.
Operating income in the third quarter increased 27.5% year over year to $264 million. Quarterly operating expenses were $2,260 million, rising 85.7% year over year. Quarterly adjusted EBITDA was $999 million, up a considerable 69.9% year over year. However, adjusted EBITDA margin was 39.6% versus 41.4% in the prior-year quarter.
In the third quarter of 2016, Frontier Communications generated $321 million of cash from operations compared with $345 million in the prior-year quarter. Free cash flow in the reported quarter was $168 million compared with $151 million in the year-ago quarter.
Liquidity
Frontier Communications exited the third quarter of 2016 with $331 million of cash and cash equivalents compared with $936 million at 2015-end. Total debt at the end of the reported quarter was $17,943 million compared with $15,892 million at the end of 2015. At third quarter-end, the debt-to-capitalization ratio was 0.79 against 0.73 at the end of 2015.
Subscriber Statistics
As of Sep 30, 2016, the number of residential customers decreased 3% sequentially to 5,073,000. The average monthly residential revenue per customer was $82.34, down 1% sequentially. Residential customer monthly churn was 1.08% compared with 1.91% in the prior quarter. Business customers decreased 2.3% sequentially to 516,000. The average monthly business revenue per customer was $668.3, up 1.6%. Frontier Communications had 4,404,000 high-speed broadband subscribers, down 2.2% sequentially and 1,526,000 video customers, down 5.7% sequentially.
Outlook
For 2016, Frontier Communications expects adjusted free cash flow in the range of $920 million to $950 million. Capital expenditures will be in the $1,250 million to $1,275 million range. For the fourth quarter of 2016, the company expects adjusted EBITDA to be at least $1 billion.
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Frontier Communications (FTR) Reports In-Line Loss in Q3
Frontier Communications Corp. reported mixed financial results in the third quarter of 2016. The company’s adjusted net loss was in line with the Zacks Consensus Estimate but revenues fell short of the same.
On a GAAP basis, net loss in the reported quarter was $134 million or a loss of 12 cents per share compared with a net loss of $81 million or 7 cents per share in the prior-year quarter. However, quarterly adjusted (excluding special items) loss per share was 4 cents, in line with the Zacks Consensus Estimate.
Total revenues increased a whopping 77.2% year over year to $2,524 million. The significant jump in revenues can primarily be attributable to the acquisition of certain wireline assets from Verizon Communications Inc. (VZ - Free Report) . However, the figure lagged the Zacks Consensus Estimate of $2,561 million.
Segment-wise, Customer revenue totaled $2,319 million, up a substantial 89.6% year over year while Switched access and subsidy revenues were $205 million, inching up 2% year over year. Within the Customer segment, voice services revenue totaled $809 million, climbing 61.8%, Data and Internet services revenues came in at $1,045 million, advancing 77.4%; video revenues were $392 million, soaring an astounding 452.1% and Other revenue totaled $73 million, up 15.9%. Category-wise Residential revenues were $1,272 million, up a massive 109.9% while Business revenues came in at $1,047 million, up 69.7%.
Operating income in the third quarter increased 27.5% year over year to $264 million. Quarterly operating expenses were $2,260 million, rising 85.7% year over year. Quarterly adjusted EBITDA was $999 million, up a considerable 69.9% year over year. However, adjusted EBITDA margin was 39.6% versus 41.4% in the prior-year quarter.
Frontier Communications faces intense competition from large telecom operators like AT&T Inc. (T - Free Report) and Comcast Corp. (CMCSA - Free Report) . Frontier Communications currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cash Flow
In the third quarter of 2016, Frontier Communications generated $321 million of cash from operations compared with $345 million in the prior-year quarter. Free cash flow in the reported quarter was $168 million compared with $151 million in the year-ago quarter.
Liquidity
Frontier Communications exited the third quarter of 2016 with $331 million of cash and cash equivalents compared with $936 million at 2015-end. Total debt at the end of the reported quarter was $17,943 million compared with $15,892 million at the end of 2015. At third quarter-end, the debt-to-capitalization ratio was 0.79 against 0.73 at the end of 2015.
Subscriber Statistics
As of Sep 30, 2016, the number of residential customers decreased 3% sequentially to 5,073,000. The average monthly residential revenue per customer was $82.34, down 1% sequentially. Residential customer monthly churn was 1.08% compared with 1.91% in the prior quarter. Business customers decreased 2.3% sequentially to 516,000. The average monthly business revenue per customer was $668.3, up 1.6%. Frontier Communications had 4,404,000 high-speed broadband subscribers, down 2.2% sequentially and 1,526,000 video customers, down 5.7% sequentially.
Outlook
For 2016, Frontier Communications expects adjusted free cash flow in the range of $920 million to $950 million. Capital expenditures will be in the $1,250 million to $1,275 million range. For the fourth quarter of 2016, the company expects adjusted EBITDA to be at least $1 billion.
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