Frontier Communications Earnings Cheat Sheet: Streak of Two Straight Profit Rises Snapped

Rising revenue was not enough for S&P 500 (NYSE:SPY) component Frontier Communications Corporation (NYSE:FTR) as the telecom services company saw profit fall in the second quarter. Frontier Communications Corporation provides telecommunications services to rural areas and small and medium-sized towns and cities.

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Frontier Communications Earnings Cheat Sheet for the Second Quarter

Results: Net income for the telecom services company fell to $32.3 million (3 cents per share) vs. $35.1 million (11 cents per share) a year earlier. This is a decline of 8.1% from the year earlier quarter.

Revenue: Rose more than twofold to $1.32 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: FTR reported adjusted net income of 6 cents per share. By that measure, the company fell in line with the mean estimate of 6 cents per share. Analysts were expecting revenue of $1.33 billion.

Quoting Management: “The one year anniversary of Frontier’s transformational acquisition demonstrated a solid turnaround in operations and improved profitability,” said Maggie Wilderotter, Chairman & CEO of Frontier Communications. “Our broadband network has now been expanded to 466,000 new homes, a rich opportunity that we’re only beginning to penetrate, and our business revenue pipeline is solid across all market segments. We have achieved $424 million of annualized cost savings and are increasing our target to $600 million. Frontier has a great market opportunity ahead of it which, when combined with our cost discipline, will continue to reward our stakeholders with a stronger capital structure and a stable dividend.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased more than twofold to $1.35 billion in the first quarter. The figure rose more than twofold in the fourth quarter of the last fiscal year from the year earlier and climbed more than twofold in the third quarter of the last fiscal year from the year-ago quarter.

Last quarter’s profit decrease breaks a streak of two consecutive quarters of year-over-year profit increases. Net income rose 28.5% in the first quarter and 944.6% in the fourth quarter of the last fiscal year.

The company has now fallen in line with estimates for the past two quarters. It reported net income of 6 cents in the first quarter.

Competitors to Watch: AT&T Inc. (NYSE:T), Windstream Corporation (NASDAQ:WIN), Verizon Communications Inc. (NYSE:VZ), Sprint (NYSE:S), Telephone & Data Systems, Inc. (NYSE:TDS), Warwick Valley Telephone Co. (NASDAQ:WWVY), Otelco, Inc. (NASDAQ:OTT), Cbeyond, Inc. (NASDAQ:CBEY), Cincinnati Bell Inc. (NYSE:CBB), and CenturyLink, Inc. (NYSE:CTL).

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(Source: Xignite Financials)