Frontier Communications Posts Q4 Earnings, Revenues Lag
Frontier Communications Corp. FTR reported mixed financial results in the fourth quarter of 2015. Contrary to the Zacks Consensus Estimate of net loss, the company posted net income in the reported quarter. Meanwhile, the top line missed the mark.
On A GAAP basis, net loss in the reported quarter was $156 million or a loss of 14 cents per share compared with a net income of $14 million or a penny per share in the prior-year quarter. However, quarterly adjusted (excluding special items) earnings per share of 5 cents were in contrast to the Zacks Consensus Estimate of a loss of 3 cents.
Total revenues rose 6.2% year over year to $1,413 million. However, the figure missed the Zacks Consensus Estimate of $1,419 million. Of the total, Voice revenues came in at $482 million, down 8.2%. Data & Internet revenues stood at $589 million, up 6.1%. Other revenues were $136 million, up 11.5%. Revenues from Switched access and subsidy grossed $206 million, up a whopping 60.9%.
Segment-wise Residential revenues were $594 million, down 1.2% year-over-year whereas Business revenues came in at $613 million, up 2%.
Operating Income
Operating income in the fourth quarter increased 5.2% year-over-year to $182 million. Operating income margin stood at 12.9% compared with 13.0% in the year-ago quarter. Quarterly operating expenses were $1,231 million, up 6.4% year over year.
Cash Flow
In the fourth quarter of 2015, Frontier Communications generated $501 million of cash from operations against $496 million in the prior-year quarter. Free cash flow in the reported quarter was a mere $12 million against $193 million in the year-ago quarter.
Liquidity
Frontier Communications exited 2015 with $936 million of cash and cash equivalents compared with $682 million at 2014-end. Total debt at the end of 2015 was $15,892 million against $9,691 million at the end of 2014. At 2015-end, the debt-to-capitalization ratio stood at 0.73 as against 0.72 at the end of 2014.
Subscribers Statistics
As of Dec 31, 2015, the number of residential customers declined 0.73% to 3,124,000. The average monthly residential revenue per customer was $63.14 against $65.67 in the year-ago quarter. Business subscribers decreased 1.70% year over year to 289,000. The average monthly business revenue per customer was $700.03 against $688.31 in the prior-year quarter.
As of Dec 31, 2015, Frontier Communications had 2,462,000 high-speed broadband subscribers and 554,000 video customers. In the reported quarter, the company gained 28,000 high-speed broadband customers but lost 6,000 video subscribers.
Zacks Rank & Stocks to Consider
Frontier Communications currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry are CenturyLink Inc. CTL, United States Cellular Corp. USM and Sprint Corp. S. All the three stocks currently carry a Zacks Rank #2 (Buy).
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