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Frontier Communications (FTR) Q2 Loss Narrower than Expected
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Frontier Communications Corp. reported mixed financial results in the second quarter of 2017. The company’s adjusted net loss was narrower than the Zacks Consensus Estimate while revenues lagged the same.
On a GAAP basis, net loss in the reported quarter was $715 million or $9.21 per share compared with a net loss of $80 million or $1.05 per share in the prior-year quarter. However, quarterly adjusted (excluding special items) loss per share was $1.10, narrower than the Zacks Consensus Estimate of a loss of $1.12.
Total revenue decreased 11.7% year over year to $2,304 million, lagging the Zacks Consensus Estimate of $2308.7 million. Segment-wise, Customer revenues totaled $2,106 million, down 11.5% year over year while Switched access and subsidy revenues were $198 million, down 12.8% year over year.
Within the Customer segment, voice services revenues totaled $724 million, down 13.4%, data and internet services revenues came in at $974 million, down 7.1%, video revenues plunged 21.5% to $329 million and Other revenues totaled $79 million, up 1.3% year over year.
Category-wise, Consumer revenues were $1,124 million, down 15.6%, Commercial revenues came in at $982 million, down 6.4%. Switched access and subsidy revenues were $198 million, down 12.8% year over year.
Operating loss in the second quarter was $394 million against an operating income of $311 million in the prior-year quarter. Quarterly operating expenses were $2,698 million, up 17.5% year over year. Quarterly adjusted EBITDA was $906 million, down 12.2% year over year. Adjusted EBITDA margin was 39.3% compared with 39.6% 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) . Nevertheless, the company improved customer churn in the markets of California, Texas and Florida where it acquired FiOS wireline assets from Verizon Communications Inc. (VZ - 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 second quarter of 2017, Frontier Communications generated $529 million of cash from operations compared with $693 million in the prior-year quarter. Free cash flow in the reported quarter was $205 million compared with $250 million in the year-ago quarter.
Liquidity
Frontier Communications exited the second quarter of 2017 with $387 million of cash and cash equivalents compared with $522 million at 2016-end. Total debt at the end of the reported quarter was $17,846 million compared with $17,923 million at the end of 2016. At the end of second-quarter 2017, the debt-to-capitalization ratio was 0.83 compared with 0.79 at the end of 2016.
Frontier Communications Corporation Price, Consensus and EPS Surprise
As of Jun 30, 2017, the number of consumer segment customers decreased 11.6% year-over-year to 4,585,000. The average monthly consumer revenue per customer was $80.38, up 0.2% sequentially. Consumer segment customer monthly churn was 2.24% compared with 1.91% in the year-ago quarter. Commercial segment customers decreased 10.4%, year-over-year to 473,000. Frontier Communications had 4,063,000 high-speed broadband subscribers, down 8.9% and 1,007,000 video customers, down 22.8% year over year.
Outlook
For 2017, Frontier Communications expects adjusted free cash flow in the range of $800–$900 million. Capital expenditures will be in the $1,100–$1,200 million range.
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Frontier Communications (FTR) Q2 Loss Narrower than Expected
Frontier Communications Corp. reported mixed financial results in the second quarter of 2017. The company’s adjusted net loss was narrower than the Zacks Consensus Estimate while revenues lagged the same.
On a GAAP basis, net loss in the reported quarter was $715 million or $9.21 per share compared with a net loss of $80 million or $1.05 per share in the prior-year quarter. However, quarterly adjusted (excluding special items) loss per share was $1.10, narrower than the Zacks Consensus Estimate of a loss of $1.12.
Total revenue decreased 11.7% year over year to $2,304 million, lagging the Zacks Consensus Estimate of $2308.7 million. Segment-wise, Customer revenues totaled $2,106 million, down 11.5% year over year while Switched access and subsidy revenues were $198 million, down 12.8% year over year.
Within the Customer segment, voice services revenues totaled $724 million, down 13.4%, data and internet services revenues came in at $974 million, down 7.1%, video revenues plunged 21.5% to $329 million and Other revenues totaled $79 million, up 1.3% year over year.
Category-wise, Consumer revenues were $1,124 million, down 15.6%, Commercial revenues came in at $982 million, down 6.4%. Switched access and subsidy revenues were $198 million, down 12.8% year over year.
Operating loss in the second quarter was $394 million against an operating income of $311 million in the prior-year quarter. Quarterly operating expenses were $2,698 million, up 17.5% year over year. Quarterly adjusted EBITDA was $906 million, down 12.2% year over year. Adjusted EBITDA margin was 39.3% compared with 39.6% 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) . Nevertheless, the company improved customer churn in the markets of California, Texas and Florida where it acquired FiOS wireline assets from Verizon Communications Inc. (VZ - 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 second quarter of 2017, Frontier Communications generated $529 million of cash from operations compared with $693 million in the prior-year quarter. Free cash flow in the reported quarter was $205 million compared with $250 million in the year-ago quarter.
Liquidity
Frontier Communications exited the second quarter of 2017 with $387 million of cash and cash equivalents compared with $522 million at 2016-end. Total debt at the end of the reported quarter was $17,846 million compared with $17,923 million at the end of 2016. At the end of second-quarter 2017, the debt-to-capitalization ratio was 0.83 compared with 0.79 at the end of 2016.
Frontier Communications Corporation Price, Consensus and EPS Surprise
Frontier Communications Corporation Price, Consensus and EPS Surprise | Frontier Communications Corporation Quote
Subscriber Statistics
As of Jun 30, 2017, the number of consumer segment customers decreased 11.6% year-over-year to 4,585,000. The average monthly consumer revenue per customer was $80.38, up 0.2% sequentially. Consumer segment customer monthly churn was 2.24% compared with 1.91% in the year-ago quarter. Commercial segment customers decreased 10.4%, year-over-year to 473,000. Frontier Communications had 4,063,000 high-speed broadband subscribers, down 8.9% and 1,007,000 video customers, down 22.8% year over year.
Outlook
For 2017, Frontier Communications expects adjusted free cash flow in the range of $800–$900 million. Capital expenditures will be in the $1,100–$1,200 million range.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>