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Is Frontier Communications Any Different This Time Around?

Business Quant profile picture
Business Quant


  • Frontier Communications beat the Street's revenue and EPS estimates after a long dry spell.
  • It also showed signs of improvements in subscriber trends.
  • Investors should keep an eye on the bigger picture and ignore the short-term noise.

Frontier Communications (FTR) announced its first quarter results after market close yesterday. The beleaguered telecom company beat the Street’s revenue and EPS forecasts after a long dry spell, and so its shares surged in after-hours trading. The company showed signs of stabilization on several fronts. Only time will tell how long its recovery momentum will last for, but for now, let’s dig deeper into its latest earnings report to have a better understanding of its financial and operating position.

Springing a surprise

I’d like to start by saying that Frontier Communications had pretty much developed a reputation of disappointing analysts and its shareholders. The analyst community would come out with conservative to pessimistic forecasts, only to see Frontier missing the projections time and again. If that wasn’t enough, it’s management would then lower their guidance for subsequent reporting periods just so that they could meet their guidance and temper the street’s estimates going forward. But it seems like Frontier’s management was able to break the vicious loop of disappointment this time around.

The telecom services provider reported yesterday that its revenue and EPS figures for Q1 stood at $2.19 billion and ($0.58) per share respectively. While the revenue figure still marked an almost 1.1% decline on a sequential basis and the company posted a negative EPS, the silver lining here was that its results were better than what the analysts were collectively forecasting.

(Source: Business Quant, Estimize)

Besides, as the chart attached below would indicate, it's rate of revenue decline has noticeably slowed down. For a company that was considered to be in a state of terminal decline and a goner until recently, this is actually a positive sign.

(Source: Business Quant, MarketXLS)

Fact of the matter is that management of Frontier Communications had proclaimed in its Q2 FY17

This article was written by

Business Quant profile picture
Business Quant is a comprehensive investment research platform. It hosts KPI data, financial data and analytical tools to help you become a better investor. You don’t have to go through boring SEC filings to keep a track of AT&T’s subscriber count, Apple’s revenue from iPhones or Disney’s revenue by region. Our Granular KPI Data tool does that for you and it does so much more. Get an edge over the market, from day one. Watch Business Quant in action here.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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