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Frontier Communications’ Disappointing Q2 Results

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Aug. 3 2018, Published 8:46 a.m. ET

Continued loss per share

Frontier Communications (FTR) has been posting losses per share for the last two quarters. It disappointed investors again in the second quarter of 2018 with a loss per share of $0.80. It released its results on July 31.

It reported in-line revenues but wider-than-expected losses in the quarter. Its losses have been more than analysts’ expectations in four of the last eight quarters. The stock closed at $5.12 on August 1, down 1.92%.

For the second quarter, Frontier’s adjusted losses of $0.80 per share were more than analysts’ expectations of a loss of $0.72 per share. Revenues of $2.16 billion were in line with Wall Street’s expectations.

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Frontier’s Q2 results

Although Frontier’s loss of $0.80 per share in Q2 2018 was more than the estimates, it was an improvement over its loss per share of $1.10 in Q2 2017. Its revenue of $2.16 billion declined 6.2% year over year due to a decline in consumer and commercial revenues. The decrease in subsidy and other regulatory revenues also led to the fall.

In the second quarter, Frontier lost 32,000 broadband customers. It lost 100,000 customers in Q2 2017. By comparison, rivals Charter Communications (CHTR) and Comcast (CMCSA) managed to add the most broadband subscribers in the second quarter. Charter added 218,000, and Comcast added 226,000 residential high-speed Internet customers.

Frontier’s loss of 32,000 video customers was mainly due to traditional cable subscribers shifting to cheaper online streaming alternatives such as Netflix (NFLX) and Amazon (AMZN) Prime Video. Netflix and Amazon are increasingly investing in original content to dominate the streaming services market and offer original shows and movies to consumers.

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