Fron­tier stocks take an­other hit

Stamford Advocate - - Business - By Alexan­der Soule

Fron­tier Com­mu­ni­ca­tions re­ported an­other big loss in the third quar­ter, send­ing its stock into a swoon de­spite the CEO promis­ing Fron­tier is on the cusp of a turn­around as it chops costs and gears up new sys­tems to im­prove cus­tomer in­ter­ac­tions.

Fron­tier is based in Nor­walk and has its Con­necti­cut op­er­a­tions cen­ter in New Haven, sell­ing broad­band, TV and tele­phone ser­vice in por­tions of 29 states. In the third quar­ter, Fron­tier rev­enue was down $36 mil­lion or 1.6 per­cent from the pre­ced­ing three months to $2.1 bil­lion, and off nearly 6 per­cent from a year ago.

The com­pany lost 93,000 ac­counts on a net ba­sis over three months. CEO Dan Mc­Carthy told in­vest­ment an­a­lysts on Tues­day that Fron­tier also ab­sorbed a hit from “a non-re­cur­ring large deal.”

Fron­tier lost $426 mil­lion in the third quar­ter, ver­sus a $72 mil­lion loss a year ago that in­cluded $54 mil­lion paid out as div­i­dends to in­vestors hold­ing pre­ferred stock. Fron­tier did not pay out pre­ferred div­i­dends in this year’s third quar­ter, while at­tribut­ing the large part of the loss to the re­duced es­ti­mated value of its as­sets, as well as the ef­fect of state taxes.

Fron­tier shares were down 22 per­cent Wed­nes­day af­ter­noon to $4.09, its low­est level ever on an ad­justed ba­sis. Fron­tier shares had in­creased more than 20 per­cent be­tween July and Septem­ber, but the is­sue lost those gains in Oc­to­ber be­fore hav­ing ral­lied this month prior to Wed­nes­day’s plum­met.

For the first nine months of the year, Fron­tier’s has im­proved its losses by just over $400 mil­lion from the same stretch in 2017, with the com­pany aim­ing to add $500 mil­lion in op­er­at­ing prof­its on an an­nu­al­ized ba­sis within two years.

At least $275 mil­lion of that amount will be through op­er­a­tional “en­hance­ments” by in­creas­ing self­ser­vice ca­pa­bil­i­ties at customers’ fin­ger­tips to re­duce the need for field tech­ni­cians and call-cen­ter staff. Fron­tier spent $14 mil­lion in the third quar­ter in re­struc­tur­ing its busi­ness op­er­a­tions.

“We have a lot of op­por­tu­nity ahead on the ex­pense side, but we’re equally as ex­cited on sales ef­fec­tive­ness, ef­fi­ciency and re­ally churn re­duc­tion,” Mc­Carthy said Tues­day. “We think there’s big op­por­tu­nity … with the sub­scriber trends, and that will just build as we im­ple­ment smaller im­prove­ments in all of those dif­fer­ent cat­e­gories.”

Alexan­der Soule / Hearst Con­necti­cut Me­dia

A Fron­tier Com­mu­ni­ca­tions crew on a call this month in Nor­walk, where the broad­band com­pany is based.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.