Frontier Communications Corporation reported a narrower-than-expected loss in second-quarter 2018.
Top-Line and Bottom-Line Results
Frontier Communications reported an adjusted loss of 80 cents per share in the second quarter. Notably, the reported figure was narrower than the Zacks Consensus Estimate of a loss of 83 cents. Also, it was narrower than the loss of $1.10 per share incurred in the year-ago quarter.
In the reported quarter, revenues came in at $2,162 million, which lagged the Zacks Consensus Estimate of $2,171 million. Also, the top line was lower than the year-ago tally of $2,304 million.
Segmental Details
Revenues in the Customer segment were $2,065 million in the reported quarter, down 1.9% year over year.
Subsidy and other regulatory segments revenues came in at $97 million, down 51% year over year.
Costs and Margins
Selling, general and administrative expenses came in at $460 million, down from $531 million recorded a year ago. Total operating expenses came in at $1,795 million, down from $2,679 million. Operating income was $367 million against an operating loss of $375 million in the prior-year quarter.
Operating margin was 17%. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin expanded 110 basis points in the quarter to 40.9%.
Balance Sheet and Cash Flow
Exiting the second quarter, Frontier Communications had cash and cash equivalents of $384 million, up from $362 million as of Dec 31, 2017. Long-term debt summed $16,209 million, down from $16,970 million recorded at the end of 2017.
For the first six months of 2018, Frontier Communications generated $923 million cash from operating activities, higher than $829 million in the year-ago period. Total capital expenditure was $321 million compared with $263 million recorded in the prior-year quarter.
Outlook
For 2018, Frontier Communications continues to expect operating free cash flow to be around $800 million. Capital expenditures are expected to be in the range of $1,000-$1,150 million. Cash interest expenses are anticipated to be around $1.5 billion. The company expects to secure adjusted EBITDA of roughly $3.6 billion in 2018.
Zacks Rank & Other Key Picks
Frontier Communications currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the same space are Ameren Corporation (AEE - Free Report) , Atlantic Power Corporation and CenterPoint Energy, Inc. (CNP - Free Report) . All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ameren Corporation surpassed estimates thrice in the trailing four quarters with an average beat of 7.69%.
Atlantic Power exceeded estimates twice in the trailing four quarters with an average beat of 7.24%.
CenterPoint Energy surpassed estimates thrice in the trailing four quarters with an average beat of 17.06%.
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Frontier Communications Corporation reported a narrower-than-expected loss in second-quarter 2018.
Top-Line and Bottom-Line Results
Frontier Communications reported an adjusted loss of 80 cents per share in the second quarter. Notably, the reported figure was narrower than the Zacks Consensus Estimate of a loss of 83 cents. Also, it was narrower than the loss of $1.10 per share incurred in the year-ago quarter.
In the reported quarter, revenues came in at $2,162 million, which lagged the Zacks Consensus Estimate of $2,171 million. Also, the top line was lower than the year-ago tally of $2,304 million.
Segmental Details
Revenues in the Customer segment were $2,065 million in the reported quarter, down 1.9% year over year.
Subsidy and other regulatory segments revenues came in at $97 million, down 51% year over year.
Costs and Margins
Selling, general and administrative expenses came in at $460 million, down from $531 million recorded a year ago. Total operating expenses came in at $1,795 million, down from $2,679 million. Operating income was $367 million against an operating loss of $375 million in the prior-year quarter.
Operating margin was 17%. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin expanded 110 basis points in the quarter to 40.9%.
Balance Sheet and Cash Flow
Exiting the second quarter, Frontier Communications had cash and cash equivalents of $384 million, up from $362 million as of Dec 31, 2017. Long-term debt summed $16,209 million, down from $16,970 million recorded at the end of 2017.
For the first six months of 2018, Frontier Communications generated $923 million cash from operating activities, higher than $829 million in the year-ago period. Total capital expenditure was $321 million compared with $263 million recorded in the prior-year quarter.
Outlook
For 2018, Frontier Communications continues to expect operating free cash flow to be around $800 million. Capital expenditures are expected to be in the range of $1,000-$1,150 million. Cash interest expenses are anticipated to be around $1.5 billion. The company expects to secure adjusted EBITDA of roughly $3.6 billion in 2018.
Zacks Rank & Other Key Picks
Frontier Communications currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the same space are Ameren Corporation (AEE - Free Report) , Atlantic Power Corporation and CenterPoint Energy, Inc. (CNP - Free Report) . All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ameren Corporation surpassed estimates thrice in the trailing four quarters with an average beat of 7.69%.
Atlantic Power exceeded estimates twice in the trailing four quarters with an average beat of 7.24%.
CenterPoint Energy surpassed estimates thrice in the trailing four quarters with an average beat of 17.06%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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