Frontier Communications CorporationNYSE
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  • Thu, Dec. 1, 9:30 AM
    • November monthly performance was: +5.57%
    • AUM of $2.3B
    • 52-week performance vs. the S&P 500 is: +8%
    • $0.19 in dividends were paid in November
    • Top 10 Holdings as of 10/31/2016: ONEOK Inc (OKE): 2.86519%, Mattel Inc (MAT): 1.44508%, CenterPoint Energy Inc (CNP): 1.35701%, Macquarie Infrastructure Corp (MIC): 1.03507%, Coach Inc (COH): 1.03167%, Frontier Communications Corp Class B (FTR): 1.00602%, Microchip Technology Inc (MCHP): 0.94734%, SCANA Corp (SCG): 0.92707%, CMS Energy Corp (CMS): 0.9082%, Helmerich & Payne Inc (HP): 0.84858%
    | Thu, Dec. 1, 9:30 AM
  • Wed, Nov. 16, 3:56 PM
    • Perhaps seeing writing on the wall at the FCC, Chairman Tom Wheeler has dropped a planned reform of the the U.S. business data services market, a $45B industry occupied by key telecom infrastructure players.
    • Following pressure from Republicans on Congress' oversight panels, Wheeler pulled a vote on the BDS reform from tomorrow's agenda. Any measures approved in the next couple of months would face reversal if president-elect Donald Trump restocks the FCC as a Republican-majority panel.
    • Wheeler had already scaled back original plans for reforming BDS, a market that covers special access lines that run much of modern society (including ATMs and credit card readers among other financial networks, and hospital/school networks, as well as mobile backhaul).
    • Key BDS players are moving into the close: T +1.1%, VZ +1.2%, CTL -0.7%, FTR +3.8%, BT -0.7%.
    • Previously: With White House changing, set-top box reform may be on life support (Nov. 16 2016)
    • Previously: Frontier Communications issues statement on FCC fact sheet; FTR, CTL jump (Oct. 07 2016)
    | Wed, Nov. 16, 3:56 PM | 17 Comments
  • Wed, Nov. 16, 3:31 PM
    • With Donald Trump set to take over the White House, FCC Chairman Tom Wheeler's plan to reform the pay TV set-top box market is "95% dead," according to one analyst.
    • Wheeler's proposal to kill off the boxes met with opposition from the industry even after it was modified to be much closer to pay TV providers' app-focused approach. The FCC said the market for the boxes sat at $20B a year and that the cost of renting them had gone up 185% since 1994, while other consumer electronics dropped 90% in price over that period.
    • "I would say it's 95 percent dead," said Bloomberg Intelligence's Matthew Schettenhelm. "It's a very long road to get this done.”
    • House Republicans have asked Wheeler to focus on the ongoing broadcast incentive spectrum auction, and not to move forward with “complex and controversial items that the new Congress and Administration will have an interest in reviewing."
    • That includes an open item on Business Data Services as well, not to mention lengthy reviews ahead for AT&T/Time Warner and Level 3/CenturyLink deals.
    • Public Knowledge's Chris Lewis says it's too early to hold a funeral: "We don't know what Trump thinks about set-top boxes."
    • Previously: FCC pulls set-top box vote from today's meeting agenda (Sep. 29 2016)
    | Wed, Nov. 16, 3:31 PM | 33 Comments
  • Wed, Nov. 9, 11:34 AM
    • While Time Warner is trading lower as investors digest a slimmer chance of a buyout by AT&T under a Trump administration, Sprint (NYSE:S) -- a company long thought to again become a merger prospect after a change in the White House -- is up 12.5% and hitting two-year highs today.
    • Its oft-discussed merger matchup partner, T-Mobile (NASDAQ:TMUS) is up 3.8%.
    • Meanwhile, changes are likely coming to the FCC, Wells Fargo argues: It will at least be more conservative, if not working under new leadership soon; expecting Chairman Tom Wheeler to stay a full term is "no longer realistic."
    • "If the rhetoric of those surrounding Trump’s campaign rings true, we can expect a Republican FCC to make a big push to roll back some of the regulations put in place under President Obama such as the Title II/Net Neutrality rules," writes analyst Jennifer Fritzsche. "There may also be a push to roll back some or all of what the FCC just did on privacy."
    • "It’s unclear whether Chairman Wheeler will be able to act on the open items related to Business Data Services or set top box reform before he departs and if he does not, some suggest a Republican FCC will reverse course on these two items. There is also a big question on how a Trump FCC will view transactions including the recently announced T/TWX merger and the LVLT/CTL transaction."
    • LVLT +0.4%; CTL +0.5%. TWX -1%. Names tied to net neutrality: T, VZ, CMCSA, CHTR, OTCPK:ATCEY, CTL, FTR, CCOI, DISH.
    | Wed, Nov. 9, 11:34 AM | 219 Comments
  • Fri, Nov. 4, 6:50 PM
    • Frontier Communications (NYSE:FTR) fell more than 20% this week on worries that poor results in Q3 (which led to a restructuring plan) might jeopardize a healthy dividend yield.
    • Those concerns accelerate when you consider covenants that require Frontier to keep its profit/debt ratio below 4.5 or cut the dividend. But Citi analyst David Phipps thinks that might not have to happen until 2022.
    • In his base case, cutting sales 2.5% a year going forward, the company would need to halve the dividend in 2022 but then maintain that rate until 2026. The bear case has sales dropping 4%, calling for a halved dividend in 2019 (and then again maintained until 2026).
    • But "We think FTR credit has reacted too negatively post 3Q earnings," he writes. "On a relative value basis, we prefer FTR’s notes due 2021 & 2022 owing to yield above the high yield market average, moderate maturity, and comfortable refinancing options ... We recognize more bearish investors may think our case is not harsh enough, but we believe it is a reasonable bear case, not a nuclear bear case."
    | Fri, Nov. 4, 6:50 PM | 26 Comments
  • Thu, Nov. 3, 8:29 AM
    • October monthly performance was: -2.36%
    • AUM of $2.11B
    • 52-week performance vs. the S&P 500 is: +4%
    • $0.17 in dividends were paid in October
    • Top 10 Holdings as of 9/30/2016: ONEOK Inc (OKE): 2.9392%, Mattel Inc (MAT): 1.34299%, CenterPoint Energy Inc (CNP): 1.33823%, Macquarie Infrastructure Corp (MIC): 1.02004%, Coach Inc (COH): 1.01792%, Frontier Communications Corp Class B (FTR): 1.00738%, Microchip Technology Inc (MCHP): 0.94194%, SCANA Corp (SCG): 0.88622%, CMS Energy Corp (CMS): 0.87714%, Helmerich & Payne Inc (HP): 0.87589%
    | Thu, Nov. 3, 8:29 AM
  • Wed, Nov. 2, 2:02 PM
    • Frontier Communications (NYSE:FTR) is sliding today, down 10.9% and hitting four-year lows, following yesterday's earnings miss and a pair of key downgrades today.
    • The firm lost its buy ratings at Deutsche Bank (lowered to Hold) and Wells Fargo (cut to Market Perform). Deutsche Bank lowered its price target to $4 from a previous $5, suggesting nearly no upside from yesterday's close.
    • Revenue growth is the culprit, says DB's Matthew Niknam. "3Q results once again disappointed on both customer volumes and the top line, as FTR’s efforts to stem revenue losses remain challenged," he writes. "Expense reductions (-$50M Q/Q) did offset much of the revenue pressure this quarter, and Adj. EBITDA matched our forecast/guidance."
    • "However, we ultimately believe elevated share losses and revenue degradation are likely to continue in upcoming quarters, and that cost cuts are not enough of an offset," he continues. "We reduce 2017 revenue, Adj. EBITDA and FCF by 3%/5%/11% respectively, and are now -5% vs. 2017 EBITDA guidance/consensus."
    | Wed, Nov. 2, 2:02 PM | 20 Comments
  • Tue, Nov. 1, 6:27 PM
    • Frontier Communications (FTR -2.2%) is adding losses after hours, -3.3%, following its Q3 earnings miss that comes alongside plans for a new organizational structure.
    • The company says revenue will improve "principally by returning to normal customer trends in the CTF market (the wireline operations it acquired from Verizon) over the coming quarters."
    • It's raised its annualized cost synergy target to $1.4B from a previous $1.25B, and sees yet-to-be-attained synergies of $400M by mid-2019 ($250M of that by mid-2017).
    • Frontier is pursuing a new structure focused on newly created Commercial and Consumer business units, providing more focus for the commercial segment along with better capital allocation, it says. That will include centralizing support functions (Engineering, Finance, Human Resources, Communications, Marketing) that are currently regionalized.
    • Revenue breakout: CTF operations, $1.21B; Frontier legacy, $1.31B.
    • It's reaffirmed its guidance for EBITDA in Q4 (at least $1B), and for full 2016 it sees adjusted free cash flow of $920M-$950M and capex of $1.25B-$1.275B.
    • Press Release
    | Tue, Nov. 1, 6:27 PM | 16 Comments
  • Tue, Nov. 1, 5:24 PM
    • Frontier Communications (NYSE:FTR) declares $0.105/share quarterly dividend, in line with previous.
    • Forward yield 10.69%
    • Payable Dec. 30; for shareholders of record Dec. 15; ex-div Dec. 13.
    | Tue, Nov. 1, 5:24 PM | 3 Comments
  • Tue, Nov. 1, 4:08 PM
    • Frontier Communications (NYSE:FTR): Q3 EPS of -$0.04 in-line.
    • Revenue of $2.53B (+78.2% Y/Y) misses by $40M.
    • Press Release
    | Tue, Nov. 1, 4:08 PM | 15 Comments
  • Mon, Oct. 31, 5:35 PM
  • Fri, Oct. 28, 1:40 PM
    • CenturyLink (CTL -1.4%) is giving back some of yesterday's merger-chatter gains, but Level 3 Communications (NASDAQ:LVLT) is adding on, up another 3.9% today.
    • Level 3 jumped 10.6% yesterday, and CenturyLink rose 10%, on a report that the two were in advanced talks to merge.
    • Level 3's at $53.90 today (after closing at $46.92 on Wednesday), and it's looking for at least $60/share in a buyout and $65 "could be reasonable," says Raymond James, which cut CenturyLink to Market Perform from Outperform -- thinking that stock could trade sideways for the months it could take to close such a deal.
    • UBS sees the deal cresting $1B in synergies, given the companies' overlapping infrastructure. Analyst Batya Levi is assuming an all-stock deal at 9-11 times EBITDA and has CenturyLink at a Buy with a $36 price target (implying 18% upside).
    • Oppenheimer's Timothy Horan, meanwhile, sees more of a 50/50 cash/stock split at a $60 valuation for LVLT. He's got CTL at Market Perform but boosts LVLT to Outperform at that $60 target.
    • Among peers (and other potential targets) today: CCOI -1.2%, INXN +2%, GTT flat, ZAYO +1.9%, AKAM +0.9%, FTR -2.4%.
    | Fri, Oct. 28, 1:40 PM | 10 Comments
  • Thu, Oct. 27, 2:02 PM
    • The FCC split on party lines again today in adopting tough new privacy regulations on broadband Internet providers, rules that require an opt-in before sharing most customer data.
    • That could present a problem growing advertising for big providers including Comcast (NASDAQ:CMCSA), Charter (NASDAQ:CHTR), AT&T (NYSE:T) and Verizon (NYSE:VZ).
    • The vote passed 3-2 with strong dissents from the panel's two Republican commissioners. More public information (names, addresses) will be treated leniently, but providers will need to ask permission before sharing more sensitive data (like phone-tracked location, or sites visited and apps used).
    • The new rules, while scaled back, have drawn heavy criticism from cable/telecom and advertising sectors, with companies that fret that the move will restructure the Internet's free-content approach.
    • Other players: OTCPK:ATCEY, FTR, CTL, WIN, S, TMUS, CCOI
    | Thu, Oct. 27, 2:02 PM | 11 Comments
  • Wed, Oct. 12, 7:40 PM
    • Frontier Communications (FTR -3.1%) has opened its first Frontier Premier retail operations in California, looking toward building its business presence and pursuing higher customer interaction.
    • The cities of Norwalk and Pomona in southern California were chosen for the stores. Frontier has set up interactive demo stations for retail-level consumers and also will market its business solutions (including commercial phone systems) at the stores.
    • Earlier this year, Frontier acknowledge a rough go in its takeover of wireline operations it had taken over from Verizon in California, as well as in Texas and Florida. The company told a California hearing that it inherited corrupt data from Verizon, adding to struggles in the transition.
    • Also today, Frontier entered into a credit agreement for a $315M senior secured term loan, to repay its existing loan of the same type that it entered into in 2011.
    • Previously: Citi: Frontier hit from BDS rule revision better than feared (Oct. 11 2016)
    • Previously: Frontier Communications issues statement on FCC fact sheet; FTR, CTL jump (Oct. 07 2016)
    | Wed, Oct. 12, 7:40 PM | 20 Comments
  • Tue, Oct. 11, 7:47 PM
    • Frontier Communications (NYSE:FTR) jumped 6% on Friday after the FCC announced proposed rule reform on business data services, and the firm laid out the hit it would expect from rate reductions.
    • That impact on revenues -- $10M in 2017, and $20M in 2018 and 2019 -- was "materially better than feared," and $20M is like "a rounding error," says Citi's David Phipps.
    • Phipps, a credit analyst, thinks the rules are a credit positive that removes a key uncertainty for the dividend-friendly firm (10% yield).
    • On a relative value basis, Citi prefers the notes due 2021 and 2022 (or for more conservative investors, the 2020 notes).
    • "Since the equity telecom conference in early September we heard many investor concerns about how much impact BDS could have (ranging from $100 million to $400 million) ... Our view was the impact would be modest and at worst about one-year’s core sales decline. We believe the $20 million annual impact is a rounding error in FTR’s organic revenue decline (about 1.5%, or $150 million)."
    | Tue, Oct. 11, 7:47 PM | 10 Comments
  • Mon, Oct. 10, 7:08 PM
    • In a statement, UK incumbent BT Group (BT +0.4%) has praised a proposal from FCC chief Tom Wheeler to reform regulation of business data services.
    • "BT and many other stakeholders have long called for true market competition, and thanks to the chairman's leadership, we are one step closer to real reform ensuring that American businesses and consumers benefit from an innovative, thriving, and job-creating broadband economy," BT says in the statement.
    • "We look forward to learning more about the Commission's proposal and continue to encourage rules that reflect the reality of today's marketplace."
    • Frontier Communications (NYSE:FTR) had spiked 6% on Friday after news of the proposal, but gave back some gains today, falling 1.9%. CenturyLink (NYSE:CTL), which rose 3% on Friday, was up another 0.3% today.
    • After hours: BT +1.4%; FTR -0.5%; CTL flat.
    • Previously: Frontier Communications issues statement on FCC fact sheet; FTR, CTL jump (Oct. 07 2016)
    | Mon, Oct. 10, 7:08 PM | 2 Comments