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Frontier Communications’ Outlook for 2017

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Frontier Communications’ outlook for 2017

For 2017 and beyond, Frontier Communications’ (FTR) management anticipates increases in subscriber and revenue trends as well as its continued focus on cost containment and synergy realization. Wall Street analysts expect Frontier Communications’ earnings to decrease in 2017. Analysts expect its earnings per share (or EPS) to reach -$4.13 in 2017 compared to its 2016 EPS of -$1.35.

The company also anticipates synergy realization to come from the integration of AT&T’s (T) and Verizon’s (VZ) wireline businesses in Connecticut and the California, Texas, and Florida (or CTF) markets, respectively. Frontier Communications accomplished the procurement of AT&T’s and Verizon’s wireline businesses in October 2014 and April 2016, respectively.

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Key points from Frontier’s outlook

During Frontier Communications’ 2Q17 earnings conference call, its management reaffirmed the company’s fiscal 2017 guidance. Its management anticipates adjusted FCF (free cash flow) to be $800 million–$900 million in 2017.

The company expects its capital spending to reach $1.1 billion–$1.2 billion in 2017. Frontier Communications’ management is confident that the company can achieve an adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] level of $3.8 billion by the end of 2017 through improved operating metrics and cost-cutting initiatives.

The company’s management anticipates the integration its operating and capital expenditures of less than $50 million each. Also, zero cash taxes are anticipated, excluding any impact from upcoming legislation.

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