The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Frontier Communications beat slightly on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted slightly and GAAP earnings per share increased significantly.
Margins increased across the board.
Frontier Communications booked revenue of $1.25 billion. The 12 analysts polled by S&P Capital IQ expected a top line of $1.24 billion on the same basis. GAAP reported sales were 3.0% lower than the prior-year quarter's $1.29 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.07. The 13 earnings estimates compiled by S&P Capital IQ anticipated $0.07 per share. GAAP EPS of $0.07 for Q3 were 250% higher than the prior-year quarter's $0.02 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 91.9%, 120 basis points better than the prior-year quarter. Operating margin was 22.3%, 280 basis points better than the prior-year quarter. Net margin was 5.3%, 370 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.23 billion. On the bottom line, the average EPS estimate is $0.07.
Next year's average estimate for revenue is $4.99 billion. The average EPS estimate is $0.27.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 977 members out of 1,085 rating the stock outperform, and 108 members rating it underperform. Among 204 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 180 give Frontier Communications a green thumbs-up, and 24 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 $5.16.
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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. The Motley Fool has no positions in the stocks mentioned above. 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.