Frontier Communications – Is The Worst Over Or Is There More To Come?

Frontier Communications (FTR) has been a terrible investment over the last few years. The following chart highlights the misery for a company that has cut the dividend 60% (from $1.00 to $0.40) over the years due to a persistent revenue bleed and the acquisition of 4.8 million access lines from Verizon in 2010.

Is the worst over? Frontier Communications released their 2013 third quarter results on November 5. There number one priority is to stem the revenue declines and by default improve customer retention.  So how are they doing? Based on the continuing revenue challenge ahead of them this article will limit the discussion to the following:

  • Revenue trend
  • Customer retention
  • Effects on FCF estimates (& by default the dividend)
  • Conclusion

Based on the trends, which is shorthand for measuring management’s performance, we can derive some insight into the safety of the dividend.  Dividend safety is a priority for FTR investors and their biggest worry given the previous cuts.


Business revenue:  2013 has not been a good year for business revenue after a large drop in Q1 and a downward trend through Q3 due to declines in wireless backhaul revenue.  The trend based on past performance is not pretty however management made some predictions that would drastically change the direction. Maggie Wilderotter –CEO said the following on the Q3 conference call:
…Click Here to continue to the full article…


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