Frontier Communications reported third-quarter 2014 results with
the top line meeting the Zacks Consensus Estimate and the bottom
line beating the same. We believe that the backhaul revenue
pressure, integration costs as well as higher financial leverage
will continue to weigh on the company s earnings. However, product
introductions, broadband expansion and cash flow management by
operating expense reduction should prove accretive. Additionally,
changes in the channel distribution structure and Frontier's
relentless focus on infrastructural development, enhancement of
network speed and shareholders' return bode well for long-term
growth. We thus maintain our Neutral recommendation on Frontier
Based in Stamford, CT, Frontier Communications Corporation is a
communications company providing services to rural areas and small
and medium-sized towns and cities. Frontier offers voice,
high-speed Internet, satellite video, wireless Internet data
access, data security solutions, bundled offerings, specialized
bundles for small businesses and home offices, and advanced
business communications access solutions for medium and large
businesses. It operates across 27 states with approximately 14,017
employees. The company also provides television services, which
allows access to various digital television channels featuring
movies, sports, news, music, and high-definition TV programming and
wireless data services. Formerly known as Citizens Communications
Company, Frontier Communications Corporation changed its name to
the present form in Jul 2008.
The company's customers include both residential and business.
Its services include access services local services long distance
services data and Internet services directory services television
and wireless services. Residential and business customers accounted
for approximately 42% and 46%, respectively, of the total revenue
in 2013. Regulatory services accounted for 12% of the total 2013
In Jul 2010, Frontier Communications had acquired Verizon
Communications Inc.'s local wireline operations in 14 states. With
this acquisition, Frontier has taken control of over 4.8 million
Verizon phone lines, trebling its size to become the largest
rural-only service provider in the United States.
In Apr 2012, Frontier announced the disposition of its one-third
stake in regional telecom carrier Mohave Wireless to Verizon
Frontier Communications Corporation (FTR): Read the
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