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What Awaits Frontier Communications (FTR) in Q1 Earnings?

Zacks Equity Research

Frontier Communications Corporation FTR is scheduled to report first-quarter 2019 financial results on Apr 30, after the closing bell. In the last reported quarter, the company delivered a negative earnings surprise of 50%.

Let’s find out how things are shaping up prior to the announcement —

What Our Model Says

Our proven model shows that Frontier Communications is likely to beat earnings this quarter as it has the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is exactly the case here as you will see below:

Earnings ESP: Frontier Communications’ Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +55.80% as the former is pegged at a loss of 20 cents and the latter at a loss of 45 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Frontier Communications Corporation Price and EPS Surprise

Frontier Communications Corporation Price and EPS Surprise

Frontier Communications Corporation price-eps-surprise | Frontier Communications Corporation Quote

Zacks Rank: Frontier Communications currently has a Zacks Rank #3. This increases the predictive power of ESP.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Factors at Play

In January 2019, Frontier Communications completed the sale of 100 wireless communication towers primarily in Connecticut, New York, and California for approximately $80 million. The assets were sold to Everest Infrastructure Partners — a Pittsburgh, PA-based investment firm specializing in infrastructure investments. The divesture is part of the company’s long-term strategy to strengthen its balance sheet.

It launched Frontier Connect – Cloud that leverages the breadth of its Ethernet network to provide customers a secure and private cloud connection. This improved cloud application performance while reducing latency by enabling more consistent throughput to cloud services.

The solution further enables application innovation and data center transformation, supporting cloud and multi-cloud strategies, bringing visibility and control to any network. The move is likely to have aided Frontier Communications’ top line in the to-be-reported quarter.

The company has progressed in its Consumer business, which is expected to result in an improved revenue trend in the quarter, backed by better execution of operational strategies and initial benefits from its transformation program.

Other Stocks to Consider

Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Cigna Corp. CI with an Earnings ESP of +5.14% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Upland Software, Inc. UPLD with an Earnings ESP of +0.32% and a Zacks Rank #1.

WillScot Corp. WSC with an Earnings ESP of +28.57% and a Zacks Rank #2.

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WillScot Corporation (WSC) : Free Stock Analysis Report
 
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