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Frontier Communications Issues Updated Guidance for 2018

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Frontier’s updated outlook for 2018

Following its disappointing third-quarter earnings results, Frontier Communications (FTR) lowered its guidance for adjusted EBITDA and adjusted FCF (free cash flow) in 2018. Frontier now expects its adjusted FCF to reach $625 million in 2018, down from the $800 million it expected earlier. The company now expects its adjusted EBITDA to reach $3.55 billion in 2018, down from the $3.6 billion it projected earlier. The company expects its capex to be in the range of $1.15 billion–$1.2 billion.

In addition, Frontier expects cash taxes of less than $10 million, cash pension and other post-employment benefits of $140 million, and cash interest expenses of $1.5 billion for 2018.

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Frontier’s third-quarter results

Frontier has been posting negative adjusted EPS for the last ten consecutive quarters. The company’s adjusted net income attributable to its common shareholders improved to -$7 million in the third quarter compared to -$73 million in the previous year’s quarter.

Frontier reported adjusted EPS of -$0.07 in the third quarter, better than its adjusted EPS of -$0.94 in the third quarter of 2017. Wall Street analysts on average had expected the company to post adjusted EPS of -$0.23 in the third quarter.

In comparison, Comcast’s (CMCSA) adjusted EPS rose ~27.5% YoY (year-over-year) to $0.65 in the third quarter. Charter Communications (CHTR) reported adjusted EPS of $1.36 in the third quarter compared to $0.19 in the previous year’s quarter. In the integrated US telecommunications space, AT&T’s (T) adjusted EPS rose ~21.6% YoY to $0.90, and Verizon’s (VZ) adjusted EPS rose ~24.5% YoY to $1.22.

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