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Frontier Communications (FTR) Q4 Loss Narrower Than Expected
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Frontier Communications Corp. reported better-than-expected financial results in fourth-quarter 2017. The company’s adjusted net loss was narrower than the Zacks Consensus Estimate and revenues surpassed the same.
Net Income
Frontier Communications’ fourth-quarter 2017 net loss (on a GAAP basis) was $1,082 million or a loss of $13.91 per share compared with a net loss of $133 million or $1.73 in the prior-year quarter. However, quarterly adjusted (excluding special items) loss per share was 59 cents, narrower than the Zacks Consensus Estimate of a loss of $1.12.
Frontier Communications Corporation Price, Consensus and EPS Surprise
Total revenues deteriorated 8% year over year to $2,217 million, outpacing the Zacks Consensus Estimate of $2,211 million. Segment wise, Customer revenues totaled $2,027 million, down 8.3% year over year, while Switched access and subsidy revenues were $190 million, down 4.5% year over year.
Within the Customer segment, voice services revenues totaled $687 million, down 11.2% year over year. Data and Internet services revenues were $939 million, down 7.3% year over year. Video revenues declined 15.1% to $310 million and Other revenues totaled $91 million, up 56.9% year over year.
Category wise, Consumer revenues were $1,086 million, down 9.2%. Commercial revenues totaled $941 million, down 7.2%. Switched access and subsidy revenues were $190 million, down 4.5% year over year.
Operating Metrics
Operating loss in fourth-quarter 2017 was $1,754 million against an operating income of $255 million in the prior-year quarter. Quarterly operating expenses were $3,971 million, up 84.4% year over year. This was primarily due to $2,078 million of non-cash goodwill impairment in the reported quarter. Quarterly adjusted EBITDA was $919 million compared with $976 in the prior-year quarter. However, adjusted EBITDA margin was 41.5% compared with 40.4% in the year-ago quarter.
Cash Flow
In the fourth quarter of 2017, Frontier Communications generated $665 million of cash from operations compared with $714 million in the prior-year quarter. Free cash flow in the reported quarter was $228 million compared with $316 million in the year-ago quarter.
Liquidity
Frontier Communications exited 2017 with $362 million of cash and cash equivalents compared with $522 million at the end of 2016. Total debt at the end of 2017 was $17,626 million compared with $17,923 million at the end of 2016. At the end of 2017, the debt-to-capitalization ratio was 0.88 compared with 0.62 at the end of 2016.
Subscriber Statistics
As of Dec 31, 2017, the number of consumer segment customers decreased 10.1% year over year to 4,397,000. The average monthly consumer revenues per customer were $81.61, up 1.6% year over year. Consumer segment customer monthly churn was 1.98% compared with 2.08% in the year-ago quarter. Commercial segment customers decreased 9.8% year over year to 453,000. Frontier Communications had 3,938,000 high-speed broadband subscribers, down 7.8% and 961,000 video customers, down 16.1% year over year.
Full-Year 2018 Outlook
For 2018, Frontier Communications expects operating free cash flow to be around $800 million. Capital expenditures will be in the range of $1,000-$1,150 million. Interest expense will be around $1.5 billion.
Recent Development
Frontier Communications competes with large telecom and cable TV operators such as AT&T Inc. (T - Free Report) and Charter Communications Inc. (CHTR - Free Report) . The company acquired selected FiOS wireline assets from Verizon Communications Inc. (VZ - Free Report) . However, the company is yet to properly integrate those assets to derive maximum synergies.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Frontier Communications (FTR) Q4 Loss Narrower Than Expected
Frontier Communications Corp. reported better-than-expected financial results in fourth-quarter 2017. The company’s adjusted net loss was narrower than the Zacks Consensus Estimate and revenues surpassed the same.
Net Income
Frontier Communications’ fourth-quarter 2017 net loss (on a GAAP basis) was $1,082 million or a loss of $13.91 per share compared with a net loss of $133 million or $1.73 in the prior-year quarter. However, quarterly adjusted (excluding special items) loss per share was 59 cents, narrower than the Zacks Consensus Estimate of a loss of $1.12.
Frontier Communications Corporation Price, Consensus and EPS Surprise
Frontier Communications Corporation Price, Consensus and EPS Surprise | Frontier Communications Corporation Quote
Revenue
Total revenues deteriorated 8% year over year to $2,217 million, outpacing the Zacks Consensus Estimate of $2,211 million. Segment wise, Customer revenues totaled $2,027 million, down 8.3% year over year, while Switched access and subsidy revenues were $190 million, down 4.5% year over year.
Within the Customer segment, voice services revenues totaled $687 million, down 11.2% year over year. Data and Internet services revenues were $939 million, down 7.3% year over year. Video revenues declined 15.1% to $310 million and Other revenues totaled $91 million, up 56.9% year over year.
Category wise, Consumer revenues were $1,086 million, down 9.2%. Commercial revenues totaled $941 million, down 7.2%. Switched access and subsidy revenues were $190 million, down 4.5% year over year.
Operating Metrics
Operating loss in fourth-quarter 2017 was $1,754 million against an operating income of $255 million in the prior-year quarter. Quarterly operating expenses were $3,971 million, up 84.4% year over year. This was primarily due to $2,078 million of non-cash goodwill impairment in the reported quarter. Quarterly adjusted EBITDA was $919 million compared with $976 in the prior-year quarter. However, adjusted EBITDA margin was 41.5% compared with 40.4% in the year-ago quarter.
Cash Flow
In the fourth quarter of 2017, Frontier Communications generated $665 million of cash from operations compared with $714 million in the prior-year quarter. Free cash flow in the reported quarter was $228 million compared with $316 million in the year-ago quarter.
Liquidity
Frontier Communications exited 2017 with $362 million of cash and cash equivalents compared with $522 million at the end of 2016. Total debt at the end of 2017 was $17,626 million compared with $17,923 million at the end of 2016. At the end of 2017, the debt-to-capitalization ratio was 0.88 compared with 0.62 at the end of 2016.
Subscriber Statistics
As of Dec 31, 2017, the number of consumer segment customers decreased 10.1% year over year to 4,397,000. The average monthly consumer revenues per customer were $81.61, up 1.6% year over year. Consumer segment customer monthly churn was 1.98% compared with 2.08% in the year-ago quarter. Commercial segment customers decreased 9.8% year over year to 453,000. Frontier Communications had 3,938,000 high-speed broadband subscribers, down 7.8% and 961,000 video customers, down 16.1% year over year.
Full-Year 2018 Outlook
For 2018, Frontier Communications expects operating free cash flow to be around $800 million. Capital expenditures will be in the range of $1,000-$1,150 million. Interest expense will be around $1.5 billion.
Recent Development
Frontier Communications competes with large telecom and cable TV operators such as AT&T Inc. (T - Free Report) and Charter Communications Inc. (CHTR - Free Report) . The company acquired selected FiOS wireline assets from Verizon Communications Inc. (VZ - Free Report) . However, the company is yet to properly integrate those assets to derive maximum synergies.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>