Frontier Communications (OTC:FTR) chairman and CEO Maggie Wilderotter said the company had a "milestone third quarter" in the intro to its third-quarter earnings report.

"Milestone" normally means passing a desirable goal. However, in this case, it refers to losing revenue at a slower pace. Revenue for the third quarter was $1.252 billion, compared to the previous quarter's $1.259 billion, compared to the 2011 third quarter revenue of $1.291 billion.

Revenue losses came about from its net departing 47,000 residential customers during the quarter. But again, compared to the same period last year, which saw a net drop of 77,000, that's... better.

Business revenue did improve over last quarter's, $581 million to $577 million, but did not quite reach the $582 million of Q3 2011.

But wait, there was actually improvement in the bottom line. Net profit rose, $67 million compared to last quarter's $18 million, and $20.4 million for last year's third quarter. Earnings were $0.07 per share.

Free cash flow has been on the decline, down to $215 million from last quarter's $285 million. That may be why, for a company that has prided itself on its generous dividend -- one which still provides a tempting 9% yield, even after being cut in half for 2012 -- the word "dividend" came up only once in the company's third quarter earnings conference call during the presentation. Curiously, dividends were not asked about at all during the Q&A.

For the dividend-curious -- and if one is a Frontier investor, that is probably a given -- the dividend-to-free-cash-flow ratio is 46%, going by Frontier's non-GAAP reconciliation method.

For the coming quarter, Frontier will be counting on a promotion for new and existing customers who sign up for double or triple play services: Apple gift cards, ranging in value from $100 to $500.

Maybe that will help. The company blamed its not-so-bright third-quarter performance on a lack of promotions.

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