Frontier Communications (FTR) Misses Q2 EPS by 8c, Revenues In-Line; Affirms Guidance

Frontier Communications (NASDAQ: FTR) reported Q2 EPS of ($0.80), $0.08 worse than the analyst estimate of ($0.72). Revenue for the quarter came in at $2.16 billion versus the consensus estimate of $2.16 billion.

Second Quarter

• Total revenue of $2.16 billion
• Continued progress toward improving subscriber trends, offset by typical summer seasonality
• Successfully concluded the $350 million synergy program on schedule
• Next phase of transformation initiatives target $500 million EBITDA benefit by year-end 2020
• Net loss of $18 million
• Adjusted EBITDA1 of $884 million

“We continued to make further progress in the second quarter with the key initiatives that we have underway across the company,” said Dan McCarthy, President and CEO. “We are pleased to have maintained good subscriber momentum despite facing typical second-quarter seasonal headwinds. Underlying trends should continue improving in the latter half of this year, once summer seasonality is behind us. I am also pleased that our efforts in Commercial have begun to drive improved revenue trends.”

“We successfully concluded our $350 million synergy program in the second quarter,” said McCarthy. “We have begun our next phase of corporate transformation, which entails both revenue enhancement and productivity improvement initiatives with targeted EBITDA benefits of $500 million by year-end 2020. The entire Frontier team remains focused on enhancing the customer experience, achieving further improvements in churn and subscriber trends, maintaining strong cash flow, strengthening the balance sheet, and improving shareholder value.”

Guidance

Guidance for 2018 remains unchanged.

• Adjusted EBITDA – Approximately $3.6 billion
• Capital expenditures – $1.0 billion to $1.15 billion
• Cash taxes – Less than $25 million
• Cash pension/OPEB – Approximately $150 million
• Cash interest expense – Approximately $1.5 billion for the full year; third quarter cash interest payments of approximately $600 million
• Operating free cash flow – Approximately $800 million

For earnings history and earnings-related data on Frontier Communications (FTR) click here.

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