Frontier Communications (NASDAQ:FTR) badly needs a win, some sign to show investors that its $10.54 billion purchase of Verizon's (NYSE:VZ) wireline business in California, Texas, and Florida (CTF) will pay off.

There was certainly no suggestion that the big acquisition would pay off in the company's Q4 earning report when subscriber counts, average revenue per residential user, and quarter-over-quarter revenue all fell. That has been the pattern in all three quarters since the Verizon deal closed, and while CEO Daniel McCarthy has done an excellent job controlling expenses, his excuses for the drop in subscribers have started to sound a bit hollow.

"Results for the fourth quarter were impacted by our intensified efforts to resolve acquired accounts in California, Texas and Florida that we have determined to be non-paying," he said in the company's Q4 earnings release. "This process is almost complete, and we expect to return to a normalized trend by the start of the second quarter. I am pleased that underlying CTF customer trends improved in Q4 and continue to improve in Q1."

McCarthy had promised a similar return to growth (or at least an end to loss) at the end of Q3 as well. Going forward, if the company does not stop the bleeding, no amount of cost-saving can save it. Aside from that, assuming that Frontier can pull off what McCarthy promises, it revealed a number of things to investors in its Q4 earnings release.

FTR Chart

Image source: YCharts.com.

A reverse split is coming

As you can see from the chart above, Frontier stock has been steadily moving in the wrong direction. It's not yet in danger of slipping below the $1 level where delisting becomes an issue, but the company plans to take a major step to make sure it does not get there.

The company's board of directors has approved a reverse stock split which will be voted on by shareholders at its May 2017 annual meeting. The ratio for the split would be between 1-for-10 and 1-for-25. The board would determine the ration within 90 days after stockholders approve the amendment (assuming they do).

A cable remote points at a TV

Frontier has been losing the cable customers it paid over $10 billion for. Image source: Getty Images.

The company has more credit flexibility

Frontier has amended its loan and revolving credit lines combining them all into a single agreement. The company said this gives it more flexibility and extends its payback date from 2018 to 2022 while the price/interest on the loan remains unchanged. In addition Frontier's maximum leverage ratio has gone up.

"These amendments significantly improve and solidify Frontier's finance picture, and provide us with additional flexibility as we transition to normalized operations in the acquired CTF properties over the coming quarters," said CFO Perley McBride.

Frontier manages money well

While the company is slowly losing the customers it spent $10.54 billion for, McCarthy and his team have done a very good job controlling costs. Frontier reduced total operating expenses in Q4 by $106 million, or 4.7%. McCarthy also explained that the company keeps finding new benefits from the CTF deal when it comes to cost-saving.

"We now expect annualized cost synergies of $1.6 billion to be achieved by mid-year 2018, up from the $1.4 billion target outlined in the 2016 third quarter earnings report, and a full year earlier than anticipated," he said. "We expect $1.25 billion of the $1.6 billion in synergies will be achieved by the end of the first quarter of 2017, which is a quarter earlier than previously announced."

That's good news in that along with credit moves, being careful with its money buys Frontier more time. It clearly needs that as three quarters into its stewardship of the former Verizon properties, it has not been able to grow (or even keep) that customer base. McCarthy keeps saying that will happen and if it does, the share price could recover quickly and, if it does not, the results will not be pretty.

Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.