Frontier stocks take another hit
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.”
A Frontier Communications crew on a call this month in Norwalk, where the broadband company is based.