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Frontier Communications Reports 2013 Fourth Quarter And Full Year Results

Stocks in this article: FTR

“We are very pleased with the consistent positive results we delivered every quarter in 2013,” said Maggie Wilderotter, Frontier’s Chairman and Chief Executive Officer. “Frontier delivered record broadband net additions of 112,250 for the year and our quarterly revenue declines improved substantially from 2012. Customer retention, average revenue per customer and broadband market share all increased in 2013 and we implemented network improvements and cost efficiencies to sustain this positive operating trend in 2014.”

Dan McCarthy, Frontier’s President and Chief Operating Officer added, “We expanded Frontier’s capabilities and services over the course of 2013, we had terrific broadband subscriber net additions and gained share in our business segment. Our expense reductions resulted in maintaining strong operating margins while making targeted investments across the business and improving customer retention. Our momentum has continued into 2014, and we have substantial runway for continued broadband penetration gains.”

Maggie Wilderotter concluded, “For 2013, our total shareholder return was among the highest in the telecom sector, and all of our employees are committed to driving shareholder value. We enter 2014 with a very competitive dividend that is supported by an attractive payout ratio. We are looking forward to the closing of the AT&T Connecticut transaction in the second half which is expected to increase our free cash flow and improve our dividend payout ratio.”

Revenue for the fourth quarter of 2013 was $1,180.4 million as compared to $1,185.3 million in the third quarter of 2013 and $1,232.6 million in the fourth quarter of 2012. Total revenue for the fourth quarter of 2013 declined sequentially by $4.9 million, or 0.4%, from the third quarter of 2013. The decrease in total revenue during the fourth quarter of 2013 is primarily due to lower voice revenue, along with lower non-switched and switched access revenue, partially offset by the increase in data services revenue and subsidy revenue.

Customer revenue for the fourth quarter of 2013 of $1,044.9 million declined 0.5% sequentially as compared to $1,050.1 million in the third quarter of 2013. Total residential revenue was $503.1 million for the fourth quarter of 2013 as compared to $506.1 million in the third quarter of 2013, a 0.6% sequential decrease in the quarter. Total business revenue was $541.8 million for the fourth quarter of 2013 as compared to $544.0 million in the third quarter of 2013, a 0.4% decline in the quarter.

At December 31, 2013, the Company had 2,803,500  residential customers and 270,800  business customers. For the year ended December 31, 2013, the Company improved the rate of decline in residential customers by 61% as compared to the prior year. The fourth quarter of 2013 resulted in a 10% sequential quarterly improvement, reflecting a loss of 18,700 customers as compared to 20,700 customers in the three months ended September 30, 2013 and 45,100 customers in the three months ended December 31, 2012. The average monthly residential revenue per customer was $59.62 in the fourth quarter of 2013, an improvement of $0.06 as compared to $59.56 in the third quarter of 2013.

During the three months ended December 31, 2013, the Company improved the rate of decline in business customers by 27% as compared to the prior year, losing approximately 3,900 customers as compared to 5,300 customers in the three months ended December 31, 2012 and 3,500 customers in the three months ended September 30, 2013. During the most recent quarter, the average monthly business revenue per customer was $662.15, or 1% higher than the third quarter of 2013.

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