Stamford, Connecticut-based Frontier Communications reported 2Q 2009 net income of $27.9 million and operating income of $136.6 million on revenue of $532.1 million, 5.4% lower than a year ago. The regional carrier’s 2Q net income per share was down 47% year-to-year and down 47% for the first half of 2009 as compared to a year ago. Fewer access lines and lower reduced long distance, switched access and subsidy revenue were the main culprits that led to lower revenue, according to management.
Frontier continues to roll out new products and services as regulatory revenue continues to decline. Partially offsetting lower revenue drivers, data and Internet service revenue increased 6%. Monthly customer revenue per access line rose 3%–about $2.19– while monthly total revenue per access line rose 2% to $1.18.
“We continue to focus on customer acquisition and retention as our primary goal,” chairman and CEO Maggie Wilderotter said. “Our access line trends continued to improve for the fourth consecutive quarter, with absolute access line losses at their lowest level in over two years. Furthermore, our ability to deliver impressive results in our core business while also executing on the Verizon acquisition speaks to the strength and bandwidth of our management team.”
2Q ’09 Operational Highlights
- Lost approximately 27,700 access lines, which now gives them a total access line count of 2,189,100
- Added 13,800 high-speed Internet subscribers to reach 613,800 total
- Added 11,400 DISH Network video customers to reach 157,400 total
2Q ’09 Financial Highlights
- $80.52 2Q average total revenue per access line per month, up 2% from $79.34 from a year ago
- Average monthly customer revenue per access line up 3% at $67.29 in 2Q as compared to $65.10 a year ago
- Operating income down 15.7%, totaling $136.6 million compared to $162 million a year ago
- Operating margin 25.7% compared to 2Q ’08 of 28.8%
- Data and Internet services revenue up 6% year over year
- 2Q capex of $55,8 million and $110.4 million for first half ’09
- Three and six-month free cash flow of $98.1 million and $244 million respectively
- Six-month adjusted operating cash flow margin 54%
- Six-month dividend payout ratio of 64%
Data and Internet services has been the only one of the six categories of revenue Frontier reports to show growth during the first and second quarters of 2009. 2Q Data and Internet services revenue of $160.551 million still falls shy of Local services revenue of $198.296 million.
