Frontier Communications (FTR) Stock Falls Despite Earnings Beat

Frontier Communications (FTR) shares are lower despite the company's positive third quarter earnings report.
By Lindsay Ingram ,

NEW YORK (TheStreet) -- Shares of Frontier Communications (FTR) - Get Report were falling 4.7% to $4.92 on Tuesday, despite the telecommunications company's positive third quarter earnings report.

Frontier reported earnings of 3 cents a share for the third quarter, beating analysts' estimates of a loss of 1 cent a share. Revenue grew 24.6% year over year to $1.42 billion in the quarter, in line with analysts' estimates.

Customer revenue fell 1.1% to $1.223 billion in the third quarter from $1.236 billion in the year-ago quarter. Residential revenue fell to $606 million from $615 million, and business revenue fell to $617 million from $621 million.

"We extended our consistent track record of strong broadband net additions, achieved another quarter of sequential stability in our Connecticut operations, and grew our Data and Internet services revenue once again," President and CEO Dan McCarthy said in a statement.

"In addition," McCarthy, added, "we completed two very significant debt transactions totaling $8.1 billion which, together with our June 2015 equity offering, provides the permanent funding to complete our acquisition of Verizon's California, Texas and Florida wireline operations."

Looking to full year 2015, Frontier said it expects free cash flow of $825 million to $865 million and capital expenditures of $700 million to $750 million.

TheStreet Ratings team rates FRONTIER COMMUNICATIONS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate FRONTIER COMMUNICATIONS CORP (FTR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

You can view the full analysis from the report here: FTR

FTR data by YCharts

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