Why Frontier Communications (FTR) Is Up Today

NEW YORK (TheStreet) -- Frontier Communications  (FTR) was rising 6.75% to $4.90 Tuesday morning after the company reported its fourth-quarter results that edged past analysts' expectations.

The company reported non-GAAP earnings per share of 7 cents on sales of $1.2 billion. This marked a one-cent EPS increase and flat revenue year over year. These figures include adjustments such as a one-cent headwind a share. (T)

Frontier also added approximately 28,000 broadband customers in the quarter.

"We are very pleased with the consistent positive results we delivered every quarter in 2013," said Chairman and CEO Maggie Wilderotter in the company's statement. "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."

Must Read: Trade-Ideas: Frontier Communications Corp Class B (FTR) Is Today's "Barbarian At The Gate" Stock

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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 expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FRONTIER COMMUNICATIONS CORP's earnings per share declined by 42.9% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, FRONTIER COMMUNICATIONS CORP's EPS of $0.14 remained unchanged from the prior years' EPS of $0.14. This year, the market expects an improvement in earnings ($0.23 versus $0.14).
  • FTR, with its decline in revenue, slightly underperformed the industry average of 0.3%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, FRONTIER COMMUNICATIONS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has significantly decreased by 47.2% when compared to the same quarter one year ago, falling from $67.00 million to $35.40 million.
  • You can view the full analysis from the report here: FTR Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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