Has Frontier Communications Turned The Corner?


The key for Frontier Communications (FTR) turning the corner is to show improvements in revenue trends which ripple through the financials affecting free cash flow and by default the safety of the dividend.  Let’s face it investors in Frontier are not investing for growth but the high yield. Frontier recently released fourth quarter and full year results and announced the acquisition of AT&T’s (T) Connecticut assets in December.  So what might the future hold based on these events? 

This article examines:

  • Revenue trends based on results and guidance used to project financials, more importantly free cash flow on a standalone basis.
  • Overlaying projections and guidance for AT&T’s Connecticut assets to the financials on a standalone basis to complete the picture.
  • Risks
  • Final thoughts

REVENUE TRENDS

Business Revenue: Business trends are based on comments by the CEO – Maggie Wilderotter on the Q3 conference call:

This quarter, we achieved stability in small business revenues for the first time since 2010. Carrier excluding wireless backhaul and small, medium and enterprise, improved over second quarter results. The one remaining headwind is our wireless backhaul revenue decline, but that was anticipated. Once we fully work through the transition in wireless backhaul during the first half of 2014, we expect the business segment to be well positioned to deliver sustainable sequential revenue growth. After three solid quarters of revenue improvement, we believe we have turned the corner in successfully mitigating revenue decline and in moving closer to our objective of growing revenue.

…Click Here to Continue reading the full article…

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