uploads///Telecom Frontier Q Adjusted EBITDA

Insights from Frontier Communications’ Earnings Trends



Frontier’s EBITDA margin over the past few quarters

In the previous part, we discussed Frontier Communications’ (FTR) revenue trend over the past few quarters. Now let’s look at FTR’s adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] margin.

Frontier Communications’ adjusted EBITDA was ~$906.0 million in 2Q17, which was slightly below analysts’ expectations of $910.0 million. The company’s adjusted EBITDA was ~$1.0 billion in 2Q16.

Frontier’s adjusted EBITDA margin was 39.3% in 2Q17, up from 39.2% in 1Q17. The sequential increase in its EBITDA margin can be traced to its continued cost-reduction programs and expense savings from synergy during its seasonally slowest quarter.

Frontier Communications’ management expects its EBITDA to stabilize on a sequential basis and potentially grow by the end of 2017. The company anticipates EBITDA margins that exceed 40% going forward.

During its 2Q17 earnings conference call, Frontier Communications’ management expressed confidence that it can achieve adjusted EBITDA of $3.8 billion by the end of 2017 through improved operating metrics and cost-cutting initiatives.

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Frontier’s peer comparison of EBITDA margins in 2Q17

In 2Q17, the integrated US telecom behemoth Verizon (VZ) reported a consolidated adjusted EBITDA margin of 37.2%. The EBITDA margin for AT&T’s (T) combined domestic wireless operations reached 41.8% in 2Q17.

Windstream’s (WIN) adjusted OIBDA (operating income before depreciation and amortization) margin was 22.6% in 2Q17.


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