Frontier’s earnings in 4Q15
Frontier Communications (FTR) reported its fiscal 4Q15 results on February 23, 2016. On an adjusted basis, Frontier surprised Wall Street analysts with positive earnings. Analysts were expecting a loss for the quarter. Frontier had an adjusted EPS (earnings per share) of ~$0.05 for 4Q15. The 4Q15 consensus estimate of Wall Street analysts was a loss per share of ~$0.03.
As we can see in the above bar graph, Frontier Communications beat Wall Street consensus earnings estimates for three quarters in a row. Earlier in 3Q15, Frontier had adjusted earnings when these analysts were expecting it to have a loss. In 2Q15, the company’s adjusted earnings were ~3.4% above analysts’ consensus estimate. However, in 4Q14 and 1Q15, Frontier’s earnings were significantly lower than Wall Street expectations.
Frontier’s margins in 4Q15
On a YoY (year-over-year) basis, Frontier’s adjusted EPS increased sharply by ~25% for 4Q15. When these results were announced, the company’s stock price rose ~12.6% from the previous day’s close.
During the quarter, Frontier’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) increased by ~5.4% YoY to reach ~$0.6 billion. YoY, the carrier’s adjusted EBITDA margin contracted by ~0.2% in 4Q15.
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In the next part of this series, we’ll see why Frontier’s revenues were lower than analyst expectations.