Frontier Communications (NASDAQ:FTR) has trimmed its losses. That provided an initial bump to its stock when the company reported on May 1. Over time, though, reality set in, and the market realized that the prospects for the company have not really changed.
The cable and internet provider posted better-than-expect first-quarter results. It achieved sequential growth in consumer revenue (meaning revenue increased in Q1 compared to Q4), and it saw its sequential loss drop to $33 million from $1.03 billion in Q4. That's an improvement (though there were one-time factors that affected the fourth quarter) and CEO Dan McCarthy put his usual positive spin on the news.
"In the first quarter we achieved growth in consumer revenue, reflecting the early results of the substantial initiatives we have under way across the company," said CEO Dan McCarthy in the earnings release, continuing:
We are also extremely pleased with the continued improvement in subscriber trends in our California, Texas, and Florida (CTF) markets, most notably that we have achieved our first quarter of positive FiOS broadband net additions.
While there are some positive signs for Frontier, the company still had less revenue ($2.19 billion) in Q1 2018 than it did in Q1 2017 ($2.35 billion). In addition, the company continues to see its customer count drop, going from 4.7 million consumer customers at the end of Q1 last year to 4.32 million at the close of Q1 2018.
The losses have slowed. Frontier lost 155,000 subscribers in Q1 2017, and that dropped to 89,000 in Q4, and 74,000 in Q1 2018, but it's still getting smaller. The reality of those numbers caused the company to lose its earnings bump and see its stock fall later in May. After closing April at $8.30, shares in Frontier closed May at $7.43, a 10% drop, according to data provided by S&P Global Market Intelligence.
Frontier has slowed its descent. That's a positive, but it's not the same as turning a corner. The company has to show that it can actually reverse its losses and gain customers. That's something Frontier has not been able to do in over two years, and whether the company has a path to survival remains very much a question.