Frontier Stock Up After Q4 Results; Executives Cutting Customer Web Churn
Frontier Communications closed up 18 percent at $2.96 Wednesday after Q4 results above some estimates. Windstream, which filed for bankruptcy Monday (see 1902250058), has fallen this week, closing Wednesday down 20 percent at 38 cents. Frontier sales were little changed…
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from the year-ago quarter at $2.12 billion, which JPMorgan Chase's Philip Cusick emailed investors was above his forecast. The total included "subsidy and other regulatory revenue" of $94 million. Cusick and another analyst noted the quarterly loss of some 67,000 broadband subscribers missed estimates. "If there was a weakness in the quarter," it was "broadband gross additions," CEO Dan McCarthy responded to an analyst question on a call Tuesday. "Consumer customer churn of 1.94%, improved sequentially and vs. Q4 2017," the telco said. Executives expect to further reduce the portion of consumers who cancel service, focusing on broadband. "You should expect to see further progress" here, McCarthy told analysts. "We have more opportunity to improve churn." This year, "we will continue to build in [Connect America Fund] markets and continue building fiber to the home high-speed internet in some non-CAF rural areas through state funding sources," said interim Chief Financial Officer Sheldon Bruha. McCarthy later said "we hit our goal" for CAF in Q4 and "the challenge is now finding unique ways to market to that." He hopes to add such subscribers. In one state, the company had apparently slightly missed a target, he said. "It had to do with some permitting on some power to some remote locations." Frontier didn't comment further. The carrier may sell more assets, after Everest Infrastructure Partners in January bought nearly 100 of the telco's wireless towers in 17 states. "We are combing the entire country looking at different opportunities to monetize something that’s not core," McCarthy responded to another question. Real estate holdings are the "most likely candidates," he added. "My expectation is you would see some additional sales, maybe not in the near term, but as we go through the next year or so."