Core Insights - Frontier Communications reported revenue of $1.51 billion for the quarter ended December 2024, reflecting a year-over-year increase of 5.6% [1] - The company's EPS was -$0.47, a decline from $0.07 in the same quarter last year, indicating a significant EPS surprise of -147.37% compared to the consensus estimate of -$0.19 [1] Financial Performance - Revenue exceeded the Zacks Consensus Estimate of $1.47 billion by 2.52% [1] - Revenue from contracts with customers was $1.49 billion, surpassing the average estimate of $1.46 billion, with a year-over-year change of +5.8% [4] - Revenue from video services was $79 million, down 18.6% compared to the previous year [4] Customer Metrics - Broadband customers totaled 3.09 million, slightly below the estimated 3.11 million [4] - Fiber revenue from consumer services was $557 million, aligning closely with the estimate of $557.64 million, representing a year-over-year increase of 15.1% [4] - Broadband net adds for business and wholesale fiber were 5 thousand, exceeding the average estimate of 4.6 thousand [4] Market Performance - Shares of Frontier Communications returned -0.1% over the past month, while the Zacks S&P 500 composite increased by 2.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near term [3]

Financial Performance - Frontier Communications reported a quarterly loss of $0.47 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.19, marking an earnings surprise of -147.37% [1] - The company posted revenues of $1.51 billion for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 2.52% and showing an increase from $1.43 billion year-over-year [2] - Over the last four quarters, Frontier Communications has surpassed consensus revenue estimates four times, but has only exceeded EPS estimates once [2] Stock Performance and Outlook - Frontier Communications shares have increased by approximately 2.9% since the beginning of the year, compared to the S&P 500's gain of 4.5% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is -$0.27 on revenues of $1.49 billion, and for the current fiscal year, it is -$1.11 on revenues of $5.98 billion [7] Industry Context - The Communication - Network Software industry, to which Frontier Communications belongs, is currently ranked in the top 16% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The favorable estimate revisions trend ahead of the earnings release has resulted in a Zacks Rank 2 (Buy) for Frontier Communications, suggesting that the shares are expected to outperform the market in the near future [6]

Revenue Growth and Customer Metrics - Frontier Communications reported a revenue growth of 3% year-over-year, with fiber revenue increasing by 14% to $3.402 billion, while copper revenue declined by 8% to $2.471 billion[220]. - The company achieved fiber broadband customer growth of 19%, adding 385,000 net fiber broadband customers, resulting in a total of approximately 2.249 million consumer fiber broadband customers[204]. - The total number of broadband customers increased by 2% to 3.193 million, driven by net additions of fiber broadband customers[215]. - Consumer revenue increased by 2% to $3,163 million, driven by growth in fiber data and value-added services, despite declines in voice and video services[227]. - Business and wholesale revenue rose by 5% to $2,710 million, primarily due to increases in fiber broadband and network access services[225]. Financial Performance - Total revenue for the year ended December 31, 2024, was $5,937 million, a 3% increase from $5,751 million in 2023[223]. - Operating income decreased to $353 million for the year ended December 31, 2024, down from $492 million in 2023, primarily due to declines in voice and video services revenue[205]. - Total operating expenses increased by 6% to $5,584 million, with significant increases in depreciation and amortization expenses by 15%[240]. - Interest expense rose by $151 million, or 23%, to $804 million, driven by a higher debt balance[253]. - Cash flows from operating activities increased by $277 million to $1,621 million for the year ended December 31, 2024, primarily due to changes in working capital[262]. Merger and Acquisition - The company entered into a Merger Agreement with Verizon, with Verizon set to acquire Frontier for $38.50 per share, representing a 43.7% premium[202]. - The company expects to close the merger with Verizon by the first quarter of 2026, pending regulatory approvals[202]. Cost Savings and Efficiency - Frontier achieved $597 million in gross annualized cost savings since 2021, exceeding its initial target of $250 million[204]. - The company anticipates that its operating cash flows and existing cash balances will be sufficient to meet its working capital and capital expenditure needs over the next twelve months[271]. Capital Expenditures and Investments - Cash flows used by investing activities decreased to $1,681 million in 2024 from $2,556 million in 2023, attributed to a $428 million reduction in capital expenditures[265]. - Capital expenditures for 2024 were $2,783 million, down from $3,211 million in 2023, with a shift in capital payments classified as financing activities[266]. Debt and Liquidity - As of December 31, 2024, the company had liquidity of approximately $2,910 million, including cash and cash equivalents of $750 million[255]. - The company has total long-term debt obligations of $11,569 million, with interest obligations of $3,748 million, and total future contractual obligations amounting to $15,987 million[291]. - The company has $1,500 million in DDTL Facility and $925 million in Revolving Facility available for liquidity, with $265 million reserved for letters of credit[269]. Pension and Benefit Obligations - The unfunded benefit obligation for the company's pension and other postretirement benefit plans was $630 million as of December 31, 2024, with cash contributions of $171 million made during the year[309]. - The company’s expected long-term rate of return on pension plan assets was adjusted to 6.65% for the period from October 1, 2024, to December 31, 2024, down from 7.50%[312]. - The company’s actual return on pension plan assets for the year ended December 31, 2024, was a gain of 5%[312]. Regulatory and Compliance - As of December 31, 2024, the company was in compliance with all covenants under existing indentures and the Amended and Restated Credit Agreement[287]. - The financial maintenance covenant leverage ratio is set to not exceed 5.25:1.00 starting June 30, 2024, with a step-down to 4.75:1.00 beginning March 31, 2027[280]. Market and Risk Management - The company does not hold or issue derivative instruments for trading purposes, indicating a conservative approach to market risk management[318]. - The company has no significant equity security investments outside of its pension plan assets, limiting its exposure to equity price risk[324]. - The company aims to limit the impact of interest rate changes on earnings and cash flows while lowering overall borrowing costs[320].

Revenue Growth - Frontier achieved full-year organic revenue growth for the first time in over 15 years, driven by a 19.2% increase in fiber customers and a 13.5% increase in fiber revenues[3]. - The company reported total revenue of $5.94 billion for the full year 2024, with operating income of $353 million and Adjusted EBITDA of $2.25 billion[7]. - For the fourth quarter of 2024, revenue was $1.51 billion, a 5.6% increase year-over-year, with Adjusted EBITDA of $595 million, up 8.4% year-over-year[11]. - Revenue for Q4 2024 was $1,506 million, up from $1,426 million in Q4 2023, representing a 5.6% increase[31]. - Total revenue for the year ended December 31, 2024, was $5,937 million, compared to $5,751 million in 2023, reflecting a 3.2% growth[33]. Customer Growth - In 2024, Frontier added a record 385,000 fiber broadband customers, resulting in a year-over-year growth of 19.2%[7]. - The company added 97,000 fiber broadband customers in Q4 2024, resulting in a customer growth of 19.8% year-over-year[11]. - Broadband customers increased to 3,094 thousand, up from 2,943 thousand year-over-year, representing a growth of 5.1%[37]. - Net customer additions for broadband were 37 thousand in Q4 2024, compared to 30 thousand in Q4 2023, reflecting a 23.3% increase[37]. - The number of broadband customers at the end of December 2024 was 2,861 thousand, up from 2,700 thousand a year earlier, indicating a 5.9% increase[49]. Financial Performance - The company generated net cash from operations of $1.62 billion for the full year 2024[11]. - Net cash provided from operating activities for the year was $1,621 million, an increase from $1,344 million in the previous year, representing a growth of 20.6%[43]. - Operating free cash flow for the year ended December 31, 2024, was $(1,625) million, an improvement from $(1,871) million in 2023[45]. - The company reported a net loss of $118 million for Q4 2024, compared to a net income of $17 million in Q4 2023[41]. - For the three months ended December 31, 2024, the net loss was $118 million compared to a net loss of $82 million for the previous quarter[45]. Capital Expenditures and Investments - Frontier's total capital investment for 2024 was $3.25 billion, including cash capital expenditures of $2.78 billion[7]. - Capital expenditures for Q4 2024 were $792 million, an increase from $329 million in Q4 2023[31]. - Capital expenditures for the year were $2,783 million, down from $3,211 million year-over-year, a reduction of 13.3%[43]. Debt and Liquidity - As of December 31, 2024, Frontier had total liquidity of $2.9 billion, with a net leverage ratio of approximately 4.8x[12]. - Long-term debt increased to $11,551 million from $11,246 million year-over-year, reflecting a rise of 2.7%[39]. - The net leverage ratio stood at 4.8x as of December 31, 2024, indicating a stable leverage position[39]. Future Prospects - Frontier is in the process of being acquired by Verizon, with the transaction expected to close by the first quarter of 2026[13][14]. - The company is pursuing a proposed merger with Verizon, which may impact future operational and financial performance[29]. Operational Metrics - Consumer fiber broadband ARPU increased to $65.54, reflecting a 3.4% year-over-year growth[7]. - Average monthly consumer revenue per customer rose to $83.58, up from $82.54 year-over-year, indicating a growth of 1.26%[37]. - Customer monthly churn improved to 1.68% from 1.43% year-over-year, showing a decrease of 0.25 percentage points[37]. - The estimated total fiber penetration rate as of December 31, 2024, was 30.6%, compared to 30.2% in the previous quarter[49]. - The EBITDA margin for the quarter ended December 31, 2024, was 34.2%, slightly up from 33.3% in the previous quarter[45].

Core Viewpoint - Frontier Communications (FYBR) is expected to report a quarterly loss of $0.19 per share, a significant decline of 371.4% year-over-year, while revenues are projected to increase by 3% to $1.47 billion [1]. Financial Projections - The consensus EPS estimate has remained unchanged over the past 30 days, indicating analysts have not revised their projections [2]. - Analysts predict 'Revenue- Revenue from contracts with customers' to reach $1.46 billion, reflecting a year-over-year increase of 3.3% [5]. - 'Revenue- Subsidy and other revenue' is estimated at $15.33 million, indicating a decline of 9.8% year-over-year [5]. - 'Revenue- Video services' is projected to be $78.16 million, showing a decrease of 19.4% year-over-year [5]. Customer Metrics - 'Revenue- Fiber- Consumer' is expected to reach $557.64 million, a year-over-year increase of 15.2% [6]. - The estimate for 'Broadband Customers - Consumer - Copper' is 619.62 thousand, down from 822 thousand a year ago [6]. - Total 'Broadband Customers - Consumer' is projected at 2.88 million, compared to 2.7 million the previous year [6]. Average Revenue Per User (ARPU) - 'Broadband ARPU - Consumer - Fiber' is expected to be $66.12, up from $64.16 in the same quarter last year [7]. - 'Broadband ARPU - Consumer - Copper' is projected at $58.02, compared to $54.22 a year ago [7]. - 'Broadband ARPU - Consumer - Total' is estimated at $64.34, an increase from $61.02 in the previous year [8]. - 'Broadband ARPU - Business - Fiber' is expected to reach $100.22, up from $98.86 year-over-year [8]. - 'Broadband ARPU - Business - Copper' is projected at $62.42, compared to $59.87 a year ago [8]. - The average prediction for 'Broadband ARPU - Business - Total' is $85.33, compared to $80.17 the previous year [9]. Market Performance - Shares of Frontier Communications have returned +0.3% over the past month, while the Zacks S&P 500 composite has increased by +4.7% [9]. - With a Zacks Rank 2 (Buy), FYBR is anticipated to outperform the overall market in the near future [10].

Core Insights - Frontier Communications reported $1.49 billion in revenue for Q3 2024, a year-over-year increase of 3.7% [1] - The company experienced an EPS of -$0.33, compared to $0.05 a year ago, indicating a significant decline [1] - Revenue exceeded the Zacks Consensus Estimate of $1.45 billion, resulting in a surprise of +2.35% [1] - The EPS surprise was -50.00%, with the consensus EPS estimate being -$0.22 [1] Revenue and Customer Metrics - Broadband customers totaled 3.06 million, slightly above the estimated 3.04 million [3] - Broadband Net Adds for Business - Fiber were 4 thousand, below the average estimate of 4.39 thousand [3] - Consumer Broadband Customers - Fiber reached 2.16 million, exceeding the estimate of 2.14 million [3] - Business Broadband Customers - Fiber were 138 thousand, close to the estimate of 138.39 thousand [3] Revenue Breakdown - Revenue from contracts with customers was $1.47 billion, surpassing the estimate of $1.44 billion, reflecting a +3.5% year-over-year change [3] - Subsidy and other revenue amounted to $18 million, exceeding the estimate of $14.67 million, with a year-over-year change of +20% [3] - Video services revenue was $83 million, slightly below the estimate of $83.85 million, showing a -20.2% change year-over-year [3] - Fiber-Consumer revenue was $537 million, close to the estimate of $539.12 million, with a +12.1% year-over-year change [3] - Other revenue was $83 million, slightly below the estimate of $83.41 million, reflecting a +2.5% year-over-year change [3] - Revenue from contracts with customers - Fiber was $867 million, exceeding the estimate of $821.31 million, representing a +14.1% year-over-year change [3] - Revenue from contracts with customers - Copper was $604 million, slightly above the estimate of $601.60 million, with a year-over-year change of -8.6% [3] - Fiber - Business and Wholesale revenue reached $330 million, surpassing the estimate of $282.19 million, indicating a +17.4% year-over-year change [3] Stock Performance - Shares of Frontier Communications returned +0.3% over the past month, compared to the Zacks S&P 500 composite's -0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1 - Frontier Communications reported a quarterly loss of $0.33 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.22, and compared to earnings of $0.05 per share a year ago, indicating an earnings surprise of -50% [1] - The company posted revenues of $1.49 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.35%, and this represents an increase from year-ago revenues of $1.44 billion [2] - Frontier Communications shares have increased approximately 39.7% since the beginning of the year, outperforming the S&P 500's gain of 19.8% [3] Group 2 - The earnings outlook for Frontier Communications is mixed, with the current consensus EPS estimate for the coming quarter at -$0.12 on revenues of $1.45 billion, and -$0.79 on revenues of $5.85 billion for the current fiscal year [7] - The Zacks Industry Rank indicates that the Communication - Network Software sector is currently in the bottom 35% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Frontier Communications has achieved consensus revenue estimates three times over the last four quarters, indicating some level of operational consistency [2]

Financial Performance - Revenue of $1.49 billion, an increase of 3.7% year-over-year, driven by fiber-based product growth[2] - Adjusted EBITDA of $549 million, up 4.4% year-over-year, despite higher customer acquisition costs[2] - Operating income for the three months ended September 30, 2024, was $86 million, down from $114 million in the same period last year, representing a 24.6% decrease[24] - Net loss for the three months ended September 30, 2024, was $(82) million, compared to a net income of $11 million in the same period last year[24] - For the nine months ended September 30, 2024, total revenue was $4,431 million, a 2.5% increase from $4,325 million in the same period last year[25] - Basic net loss per common share for the three months ended September 30, 2024, was $(0.33), compared to earnings of $0.05 in the same period last year[24] - Interest expense for the three months ended September 30, 2024, was $(203) million, an increase from $(170) million in the same period last year[24] - The company reported a net loss of $(204) million for the nine months ended September 30, 2024, compared to a net income of $12 million for the same period last year[40] Customer Growth and Metrics - Fiber broadband customer growth of 19.3% year-over-year with 108,000 new customers added[2] - Broadband customers reached 3,057 thousand as of September 30, 2024, up from 2,913 thousand a year ago, representing a year-over-year increase of 4.9%[32] - Net customer additions for broadband were 47 thousand in Q3 2024, compared to 15 thousand in Q3 2023, showing a significant improvement[32] - Fiber broadband customers increased to 2,157 thousand, compared to 2,053 thousand in the previous quarter, reflecting a growth of 5.1%[42] - The total number of broadband customers reached 2,823 thousand, compared to 2,774 thousand in the previous quarter, indicating a growth of 1.8%[42] Revenue Breakdown - Consumer fiber broadband revenue increased by 21.8% year-over-year to $414 million[3] - Business and Wholesale revenue rose by 7.6% year-over-year to $682 million[4] - Revenue from Data and Internet services for the three months ended September 30, 2024, was $1,004 million, a 12.2% increase from $895 million in the same period last year[27] - Revenue from Fiber services for the three months ended September 30, 2024, was $867 million, up from $760 million in the same period last year, indicating a 14.1% growth[29] - Total broadband revenue for the company reached $595 million for the quarter ended September 30, 2024, up from $583 million in the previous quarter[42] Capital Expenditures and Cash Flow - Total cash capital expenditures amounted to $699 million[2] - Capital expenditures for the three months ended September 30, 2024, were $699 million, an increase from $671 million in the same period last year[24] - Net cash provided from operating activities was $618 million for Q3 2024, compared to $383 million in Q3 2023, marking a 61.5% increase[37] - Net cash provided from operating activities was $1,327 million, an increase from $1,048 million year-over-year[39] - Net cash used by investing activities was $691 million in Q3 2024, a decrease from $1,419 million in Q3 2023, indicating improved cash management[37] Debt and Liquidity - Frontier had total liquidity of $2.0 billion, including a cash balance of approximately $1.3 billion[7] - Long-term debt stood at $11,556 million as of September 30, 2024, compared to $11,246 million at the end of 2023, indicating an increase of 2.8%[34] - The net leverage ratio was reported at 4.6x, calculated using adjusted EBITDA of $2,205 million over net debt of $10,246 million[35] - Cash, cash equivalents, and restricted cash at the end of the period totaled $1,480 million, up from $1,054 million a year ago, representing a 40.4% increase[38] Acquisition and Future Outlook - Verizon is set to acquire Frontier at $38.50 per share, with the transaction expected to close by Q1 2026[8][9] Operational Metrics - Total operating expenses for the three months ended September 30, 2024, were $1,403 million, up from $1,322 million in the same period last year, reflecting a 6.1% increase[24] - Average monthly consumer revenue per customer decreased slightly to $83.12 from $83.99 in Q3 2023, reflecting a 1.0% decline[32] - Customer monthly churn increased to 1.80% in Q3 2024 from 1.70% in Q3 2023, indicating a rise in customer turnover[32] - Total fiber penetration stood at 30.2% as of September 30, 2024, slightly down from 30.4% in the previous quarter[42] - Estimated broadband fiber penetration increased to 45.7% from 45.3% in the previous quarter[42]

Customer Growth and Revenue - For the nine months ended September 30, 2024, the company added approximately 279,000 consumer fiber broadband customers, compared to 222,000 for the same period in 2023, representing a 25.6% increase[173]. - The average monthly consumer fiber broadband ARPU increased by $2.31, or 4%, to $65.41 for the nine months ended September 30, 2024, compared to $63.10 in 2023[175]. - Total revenue for the nine months ended September 30, 2024, was $4,431 million, an increase of $106 million, or 2%, from $4,325 million in 2023[196]. - Consumer fiber broadband revenues improved by 23% for the nine months ended September 30, 2024, driven by higher ARPU and increased net customer additions[192]. - The company lost approximately 156,000 consumer copper broadband customers for the nine months ended September 30, 2024, compared to a loss of 173,000 in 2023, indicating improved retention[177]. Operating Expenses and Cash Flow - Total operating expenses increased by $211 million, or 5%, to $4,164 million for the nine months ended September 30, 2024, compared to the prior year[204]. - Cash flows provided from operating activities increased by $279 million to $1,327 million for the nine months ended September 30, 2024, compared to the prior year[229]. Capital Expenditures and Financing - Capital expenditures decreased to $1,991 million for the nine months ended September 30, 2024, from $2,882 million in the prior year[232]. - On May 22, 2024, the company amended its credit agreement, increasing the aggregate amount of certain additional obligations from $2,500 million to $5,500 million[238]. - On July 1, 2024, the company issued $750 million in secured fiber network revenue term notes with a weighted average yield of approximately 7.4%[240]. - As of September 30, 2024, vendor financing liabilities were $56 million, and capital expenditures for the nine months ended September 30, 2024, were $1,991 million, totaling $2,406 million when including vendor financing[236]. Regulatory and Compliance - The company is subject to regulatory developments that may impact its operational costs and obligations, including potential changes in broadband classification and universal service fund contributions[260][261]. - The company operates under franchises that require payment of franchise fees and compliance with specific customer service standards[264]. - The company believes it is in substantial compliance with applicable environmental laws and regulations, which could impose liability for cleanup costs at contaminated sites[266]. - The company is subject to various federal and state privacy regulations that could lead to increased compliance costs and uncertainty regarding consumer data usage[262]. Debt and Interest - The fair value of the company's debt was estimated at approximately $11.8 billion as of September 30, 2024, with a weighted average borrowing rate of 6.997% and a maturity of about 4.8 years[274]. - Interest expense increased by $33 million, or 19%, to $203 million for the three months ended September 30, 2024, due to a higher debt balance[221]. - A 100 basis points increase in the SOFR would result in approximately $10 million of additional interest expense for the company, assuming the SOFR rate exceeds the SOFR floor[273]. Pension and Tax - The company’s pension plan assets increased by $198 million from $2,268 million at December 31, 2023, to $2,466 million at September 30, 2024, primarily due to market value changes of $235 million and contributions of $108 million[278]. - The discount rate for the pension benefit obligation was 5.20% as of December 31, 2023, and decreased to 5.00% as of September 30, 2024[275]. - The effective tax rate for the nine months ended September 30, 2024, was 6.2%, compared to 9.7% for the same period in 2023[223]. Financial Position and Compliance - Working capital deficit increased to $567 million as of September 30, 2024, from a surplus of $506 million at December 31, 2023[228]. - As of September 30, 2024, the company was in compliance with all covenants under its existing indentures and credit agreements[252]. - The financial maintenance covenant leverage ratio is set at a maximum of 5.25:1.00, stepping down to 4.75:1.00 starting March 31, 2027[244]. - The company has no off-balance sheet arrangements that would materially affect its financial statements[254]. - The company has not made any material changes to its critical accounting policies and estimates since its last annual report[268].

MONSEY, N.Y., Sept. 05, 2024 (GLOBE NEWSWIRE) -- The law firm of Wohl & Fruchter LLP is investigating the fairness of the proposed sale of Frontier Communications Parent, Inc. (Nasdaq: FYBR) ("Frontier") to Verizon Communications Inc. ("Verizon") for $38.50 per share in cash. Wohl & Fruchter's investigation includes whether the sales price agreed upon is fair to Frontier shareholders, and whether all material information regarding the transaction has been fully disclosed. In particular, when announcing Q2 2 ...