Frontier Communications Meets on Revenues, Misses on EPS

Frontier Communications (Nasdaq: FTR  ) reported earnings on May 9. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Frontier Communications met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share contracted significantly.

Gross margins grew, operating margins grew, net margins shrank.

Revenue details
Frontier Communications reported revenue of $1.27 billion. The 12 analysts polled by S&P Capital IQ expected to see revenue of $1.26 billion on the same basis. GAAP reported sales were 5.8% lower than the prior-year quarter's $1.35 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.05. The 14 earnings estimates compiled by S&P Capital IQ anticipated $0.06 per share. GAAP EPS of $0.03 for Q1 were 40% lower than the prior-year quarter's $0.05 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 90.9%, 210 basis points better than the prior-year quarter. Operating margin was 19.7%, 10 basis points better than the prior-year quarter. Net margin was 2.1%, 200 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.25 billion. On the bottom line, the average EPS estimate is $0.06.

Next year's average estimate for revenue is $4.94 billion. The average EPS estimate is $0.23.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 967 members out of 1,068 rating the stock outperform, and 102 members rating it underperform. Among 202 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 182 give Frontier Communications a green thumbs-up, and 20 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Frontier Communications is outperform, with an average price target of $5.19.

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Seth Jayson owned shares of the following at the time of publication: Frontier Communications. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On May 14, 2012, at 5:08 PM, gcmagone wrote:

    It sure hurts to see FTR's stock price fall so much. It's like a poker game. If you fold, you guarantee your losses to date. If you draw stay in the game, there is always a chance to recover.

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