Frontier Communications posts $5.2B loss in Q2

The drumbeat of gloom continued during Frontier Communications' second quarter earnings on Tuesday with the company reporting a $5.2 billion loss.

Frontier CFO Sheldon Bruha cited several factors for the second quarter loss, including a goodwill impairment of $5.45 billion, according to a Seeking Alpha transcript. Frontier also lost $384 million on the $1.35 billion deal for selling off wireline operations and assets in Washington, Oregon, Idaho and Montana. That deal is still waiting on regulatory approvals.

RELATED: Frontier sells off some of its wireline assets for $1.35B

Frontier also had $31 million in restructuring in the second quarter, compared to $28 million in the first quarter.

RELATED: Frontier's CEO says company is on the rebound thanks to its fiber assets, better customer care

During an investor conference in May, Frontier Communications CEO and President Dan McCarthy said his company was bouncing back, but that turnaround effort wasn't reflected in the second quarter results.

Frontier lost 71,000 broadband subscribers on a net basis in the second quarter after losing 38,000 in the first quarter. Consumer fiber broadband net losses were 10,000, and consumer copper broadband net losses were 46,000.

Frontier is in the process of upgrading the former FiOS markets its bought from Verizon to 10G, which McCarthy said would primarily be used for commercial product offerings, although "it will facilitate improvements in the consumer products family."

"As a result, we have introduced a new 500 megabit lead speed offer in FiOS markets starting in Q3," McCarthy said on the call.

Frontier lost a total of 46,000 video customers in the quarter, which was a 7% decline. Video accounted for $260 million in sales to Frontier's $2.1 billion of total revenue in the second quarter.

Frontier's consumer revenue of $1.05 billion declined by 2.5% sequentially, driven primarily by customer losses. The company's commercial revenue of $922 million declined 1.1% sequentially, driven by the SME portion of the business. 

McCarthy said the increase in consumer customer churn to 2.14% "was a disappointment."

Frontier cut its full-year EBITDA guidance range to $3.35 billion to $3.42 billion. Frontier didn't have a Q&A session at the end of yesterday's earnings call, and said it wouldn't "provide any further commentary regarding its financial outlook going forward, and this includes making any further revisions to guidance."

"The finance committee of the board of directors is evaluating Frontier's capital structure," Bruha said. "This includes considering, evaluating and negotiating capital markets and/or financing transactions and/or strategic alternatives."

Frontier's shares dropped 17% to just above $1 per share after the market closed on Tuesday. Year-to-date, Frontier's shares have plunged 48% through Tuesday's close. Frontier's shares were trading at just under $1 Wednesday morning.