News that Frontier Communications' (Nasdaq: FTR) first-quarter 2012 earnings were only about 50 percent of what they'd been during the same period in 2011 ($26.8 million versus $54.7 million) led to a 7 percent decline in the value of the company's stock, which dropped 29 cents to $3.60 in Monday trading.
The earnings decline was pretty much laid at the feet of Frontier's ongoing integration of Verizon Communications' (NYSE: VZ) properties, including FiOS subscribers in nine states.
CEO Maggie Wilderotter, in a news release, tried to put a positive spin on that conversion process, noting that it is pretty much complete and "has enabled us to turn the page from acquisition integration to a focus on revenue growth, broadband penetration and operational excellence."
She added, "Our solid first quarter results show progress on revenue stability, expense reductions and margin expansion. We are well on our way to achieving our 2012 guidance."
Apparently, that wasn't enough for analysts who watch the service provider. According to the Rochester Business Journal, Frontier was expected to show a profit of 6 cents a share; it reported 3 cents. The telecom, though, topped analysts' expectations by bringing in $1.27 billion in revenue--still 5 percent less than last year's $1.35 billion but more than the $1.26 billion analysts had predicted.
FiOS also was not a first quarter winner for Frontier, which lost 4,800 customers it acquired from Verizon even though it gained 9,200 satellite TV customers and 11,700 broadband customers.
- see this Rochester Business Journal story
- see this earnings release
Special Report: Wireline in the first quarter of 2012
Verizon FiOS makes up 60% of FTTH subs in North America; Frontier looks to U-verse technology for Internet
Frontier completes 14-state conversion of Verizon's rural lines