Frontier Communications +5.6% as Macquarie tags it top telecom

• Frontier Communications (NYSE:FTR) is up 5.6%, getting a boost from becoming Macquarie's new top telecom pick fresh off FCC approval of Frontier's takeover of some of Verizon's wireline operations.
• Poring through Frontier's 8-K on the Verizon ops in California, Florida and Texas, Macquarie's Kevin Smithen sees a return to growth in operating revenues, part of "vastly improved" results that should allow for more attractive terms on the company's bond deal.
• Adjusted EBITDA margins were increasing 130 bps from the prior quarter to 30.4%, while free cash flow of $330M for the first half was up $286M from the prior year.
• Frontier shares are down 17.2% YTD but have gained 9.6% over the past couple of days.