Core Viewpoint - StandardAero Inc. will replace Frontier Communications Parent Inc. in the S&P MidCap 400 index effective January 22, 2026, due to Verizon Communications Inc.'s acquisition of Frontier Communications [1] Group 1: Index Changes - Effective January 22, 2026, StandardAero will be added to the S&P MidCap 400 index under the ticker SARO in the Industrials sector [1] - Effective January 22, 2026, Frontier Communications Parent will be deleted from the S&P MidCap 400 index under the ticker FYBR in the Communication Services sector [1] Group 2: Acquisition Details - Verizon Communications Inc. is acquiring Frontier Communications Parent, with the deal expected to close soon pending final conditions [1]

Core Insights - The company successfully navigated conflicting demands from federal and state officials to close the acquisition [1] Group 1 - The acquisition faced challenges due to differing requirements from federal and state authorities [1]

Receipt of California regulatory approval on January 15, 2026 clears path to close transaction on January 20, 2026Approved transaction is expected to expand fiber access to almost 30 million homes and businesses and accelerate Verizon’s national mobility and broadband convergence strategy Best mobile and home offers are expected to be available for customers after closing BASKING RIDGE, N.J. and DALLAS, Jan. 15, 2026 (GLOBE NEWSWIRE) -- Verizon Communications Inc. (NYSE, Nasdaq: VZ) ("Verizon") and Frontie ...

The California Public Utilities Commission is set on Thursday to approve Verizon Communications's $20 billion deal to acquire fiber-optic internet providers Frontier Communications after a series of c... ...

Core Viewpoint - Frontier Communications has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of earnings estimate revisions, which have a strong correlation with near-term stock price movements [4][6]. - Rising earnings estimates for Frontier Communications suggest an improvement in the company's underlying business, likely leading to increased stock prices [5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions [9][10]. Recent Performance of Frontier Communications - Analysts have raised their earnings estimates for Frontier Communications, with the Zacks Consensus Estimate increasing by 11.4% over the past three months [8]. - The company is expected to earn -$1.29 per share for the fiscal year ending December 2025, showing no year-over-year change [8].

Core Viewpoint - Verizon Communications is planning to raise approximately $10 billion in the corporate bond market to finance its acquisition of Frontier Communications [1] Group 1 - The funding will be utilized specifically for the deal involving Frontier Communications [1]

Acquisition Funding - Verizon initiated a corporate bond offering to finance its acquisition of Frontier [1]

Core Insights - Frontier Communications reported $1.55 billion in revenue for Q3 2025, a year-over-year increase of 4.1% and a surprise of +0.47% over the Zacks Consensus Estimate of $1.54 billion [1] - The EPS for the quarter was -$0.30, an improvement from -$0.33 a year ago, with a surprise of +25% compared to the consensus estimate of -$0.40 [1] Financial Performance - Revenue from contracts with customers was $1.53 billion, matching the average estimate and reflecting a +4.2% change year-over-year [4] - Revenue from video services was $63 million, slightly above the estimate but down -24.1% compared to the previous year [4] - Fiber consumer revenue reached $628 million, slightly below estimates but up +17% year-over-year [4] - Revenue from fiber business and wholesale was $328 million, slightly below estimates and down -0.6% year-over-year [4] Customer Metrics - Broadband customers totaled 3.31 million, in line with analyst estimates [4] - Total fiber penetration was reported at 31.3%, slightly above the average estimate of 31.2% [4] - Fiber broadband customers for consumers were 2.6 million, matching the average estimate [4] - Business and wholesale fiber broadband customers were 161 thousand, exceeding the average estimate of 158.78 thousand [4] Stock Performance - Shares of Frontier Communications returned +0.6% over the past month, compared to the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Financial Performance - Frontier Communications reported operating income of $117 million for Q3 2025, an increase of 36% compared to $86 million in Q3 2024[193]. - Total revenue for Q3 2025 was $1.55 billion, a 4% increase from $1.49 billion in Q3 2024[213]. - Revenue from data and internet services increased by 12% to $1.12 billion for Q3 2025, compared to $1.00 billion in Q3 2024[213]. - Fiber revenue increased by $89 million (10%) to $956 million for Q3 2025, while copper revenue decreased by $27 million (4%) to $577 million[216]. - Consumer fiber broadband revenues surged by 26% for both the three and nine months ended September 30, 2025, compared to the prior year periods[222]. - Business and wholesale revenues rose by 4% and 3% for the three and nine months ended September 30, 2025, respectively, driven by increases in data and internet services[224]. - Data and Internet services revenue increased by $116 million (12%) to $1,120 million for Q3 2025, and by $320 million (11%) to $3,254 million for the nine months ended September 30, 2025[229]. - Total revenue for the three months ended September 30, 2025, was $1,550 million, a $61 million (4%) increase from $1,489 million in Q3 2024[216]. Customer Metrics - Fiber broadband customer net additions were 133,000 for Q3 2025, compared to 104,000 in Q3 2024, reflecting a growth of 28%[200]. - The company added approximately 326,000 fiber passings, bringing the total to approximately 8.8 million locations passed with fiber as of September 30, 2025[190]. - Consumer customer churn for fiber broadband improved to 1.41% in Q3 2025, down from 1.49% in Q3 2024[206]. - For the three months ended September 30, 2025, the company gained approximately 80,000 consumer broadband customers, up from a net gain of 49,000 in the same period of 2024, representing a 63% increase[214]. Operating Expenses - Operating expenses increased by 2% to $1.43 billion for Q3 2025, primarily due to higher depreciation expenses[213]. - Operating expenses for the three months ended September 30, 2025, totaled $1,433 million, a $30 million (2%) increase from $1,403 million in Q3 2024[239]. - Depreciation and amortization expenses increased by $60 million (15%) to $470 million for Q3 2025[239]. - SG&A expenses decreased by $32 million for the three months ended September 30, 2025, primarily due to reductions in professional services, marketing, and compensation[244]. - Restructuring costs and other charges decreased by $7 million and $15 million for the three and nine months ended September 30, 2025, respectively, primarily due to lower severance and employee costs[248]. Capital Expenditures and Investments - Cash flows used by investing activities were $2,415 million for the nine months ended September 30, 2025, compared to $898 million for the prior year period, driven by higher capital expenditures[267]. - Capital expenditures increased to $2,421 million for the nine months ended September 30, 2025, compared to $1,991 million for the same period in 2024[268]. Debt and Liquidity - As of September 30, 2025, the company had liquidity of approximately $1,871 million, comprised of $336 million in cash and cash equivalents and available capacity on credit facilities[258]. - The company recorded an income tax benefit of $14 million and $41 million for the three and nine months ended September 30, 2025, on pre-tax losses of $90 million and $304 million, respectively[255]. - Interest expense increased by $5 million and $6 million for the three and nine months ended September 30, 2025, respectively, primarily due to a higher debt balance[254]. - As of September 30, 2025, 88% of the company's total debt had fixed interest rates, with a fair value of approximately $12.3 billion[314][316]. - The company has a floating rate exposure of $1.0 billion from a term loan facility and $480 million drawn on a $1.5 billion DDTL facility, with a potential additional interest expense of $15 million from a 100 basis points increase in SOFR[315]. Mergers and Acquisitions - The company expects to close its merger with Verizon by Q1 2026, with Verizon acquiring Frontier for $38.50 per share, a 43.7% premium[187]. Regulatory and Funding - Frontier was awarded approximately $371 million over ten years from the RDOF to build gigabit-capable broadband to about 127,000 locations in eight states[299]. - The company accepted $313 million in annual support from the FCC's CAF Phase II program, with a requirement to complete deployment by December 31, 2021[298]. - The NTIA allocated approximately $25.5 billion to states in Frontier's footprint for broadband infrastructure under the IIJA, with ongoing efforts to secure funding[300]. Pension and Interest Rate Exposure - The discount rate for the pension benefit obligation was 5.60% as of December 31, 2024, and 5.50% as of March 31, 2025[317]. - The value of the company's pension plan assets increased by $188 million from $2,328 million at December 31, 2024, to $2,516 million at September 30, 2025[320]. - The company's overall weighted average borrowing rate was 6.774% with a weighted average maturity of approximately 4 years as of September 30, 2025[316]. - The company believes that its exposure to interest rate changes is minimal and that near-term changes would not materially affect its consolidated financial position[315].

Revenue Growth - Fiber broadband revenue growth accelerated to 25% year-over-year, driven by a record 133,000 fiber net adds and 5% ARPU growth[5] - Total revenue reached $1.55 billion, marking a 4.1% increase year-over-year, despite declines in copper-based products[6] - Consumer fiber broadband revenue grew by 25.8% year-over-year to $521 million, fueled by customer growth and ARPU increases[10] - Business and Wholesale revenue increased by 3.7% year-over-year to $707 million, driven by fiber-based product growth[10] - Total revenue for the nine months ended September 30, 2025, was $4,600 million, a 3.8% increase from $4,431 million in the same period last year[27] - Broadband revenue for the nine months ended September 30, 2025, reached $1,992 million, compared to $1,747 million for the same period in 2024, representing a year-over-year increase of 14.0%[44] - Fiber broadband revenue for the nine months ended September 30, 2025, was $1,622 million, up from $1,300 million in the prior year, indicating a growth of 24.7%[44] Financial Performance - Adjusted EBITDA increased by 16% year-over-year to $637 million, supported by revenue growth and cost efficiencies[6] - Operating income for the three months ended September 30, 2025, was $117 million, significantly up from $44 million in the previous quarter and $86 million in the same quarter last year[25] - Net loss for the three months ended September 30, 2025, was $76 million, an improvement from a net loss of $123 million in the previous quarter and $82 million in the same quarter last year[25] - Adjusted EBITDA for the nine months ended September 30, 2025, was $1,827 million, compared to $1,656 million for the same period in 2024, reflecting a growth of 10.3%[41] - The EBITDA margin for the nine months ended September 30, 2025, was 35.0%, compared to 33.0% in the prior year[40] Customer Metrics - Fiber broadband customer growth was 20.2% year-over-year, with 133,000 net additions in the quarter[6] - Broadband customers increased to 3,308 thousand as of September 30, 2025, with net customer additions of 81 thousand during the quarter[31] - Total broadband customers at the end of the period were 3,078 thousand, an increase from 2,823 thousand a year earlier[44] - The total fiber penetration rate as of September 30, 2025, was 31.3%, up from 30.2% a year ago[44] - Consumer fiber churn rate for the quarter ended September 30, 2025, was 1.41%, compared to 1.49% in the previous quarter[44] Capital Expenditures and Liquidity - Cash capital expenditures amounted to $819 million, with net cash from operations generated at $504 million[6] - Frontier's total liquidity as of September 30, 2025, was approximately $1.87 billion, including a cash balance of $340 million[9] - Capital expenditures for the three months ended September 30, 2025, were $819 million, compared to $845 million in the previous quarter and $699 million in the same quarter last year[25] - Total capital expenditures for the nine months ended September 30, 2025, were $2,421 million, up from $1,991 million in the same period of 2024[40] Acquisition and Future Outlook - The pending acquisition by Verizon is expected to close by the first quarter of 2026, subject to regulatory approvals[12] ARPU and Service Metrics - Average monthly consumer revenue per customer was $83.19 for the three months ended September 30, 2025, slightly down from $84.43 in the previous quarter[31] - Total ARPU for Consumer Fiber increased to $68.59, up from $68.54 in the previous period, reflecting a growth of 0.07%[45] - Total ARPU for Business + Wholesale customers decreased to $91.93 from $90.08, representing a decline of 2.01%[45] - The average ARPU for Total services was $68.02, up from $67.91, indicating a growth of 0.16%[45] - The average ARPU for Total services in the Business + Wholesale segment was $90.50, an increase from $82.86, reflecting a growth of 9.88%[45]