Frontier Communications Corporation (FTR) saw its loss narrow to $80 million, or $0.12 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $103 million, or $0.14 a share. On an adjusted basis, net loss for the quarter stood at $43 million, or $0.04 a share compared with a net profit of $56 million, or $0.05 a share in the last year period.
Revenue during the quarter surged 70.49 percent to $2,409 million from $1,413 million in the previous year period. Gross margin for the quarter contracted 563 basis points over the previous year period to 82.69 percent. Total expenses were 89.41 percent of quarterly revenues, up from 87.12 percent for the same period last year. That has resulted in a contraction of 230 basis points in operating margin to 10.59 percent.
Operating income for the quarter was $255 million, compared with $182 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $966 million compared with $600 million in the prior year period. At the same time, adjusted EBITDA margin contracted 236 basis points in the quarter to 40.10 percent from 42.46 percent in the last year period.
Dan McCarthy, president and chief executive officer, stated, "During the quarter we made significant progress in positioning our company to deliver a better customer experience and improved financial performance, with greater financial flexibility. Our reorganization into separate Commercial and Consumer business units will result in a more customer-centric approach, while reducing expenses and enabling more efficient capital deployment. We now expect annualized cost synergies of $1.6 billion to be achieved"
Operating cash flow improves significantly
Frontier Communications Corporation has generated cash of $1,666 million from operating activities during the year, up 28.06 percent or $365 million, when compared with the last year.
The company has spent $11,259 million cash to meet investing activities during the year as against cash outgo of $878 million in the last year.
Cash flow from financing activities was $735 million for the year, down 91.12 percent or $7,540 million, when compared with the last year.
Cash and cash equivalents stood at $522 million as on Dec. 31, 2016, down 94.43 percent or $8,858 million from $9,380 million on Dec. 31, 2015.
Working capital turns negative
Working capital of Frontier Communications Corporation has turned negative to $788 million on Dec. 31, 2016 from positive $8,238 million on Dec. 31, 2015. Current ratio was at 0.68 as on Dec. 31, 2016, down from 5.35 on Dec. 31, 2015.
Debt moves up
Frontier Communications Corporation has witnessed an increase in total debt over the last one year. It stood at $17,923 million as on Dec. 31, 2016, up 12.78 percent or $2,031 million from $15,892 million on Dec. 31, 2015. Total debt was 61.78 percent of total assets as on Dec. 31, 2016, compared with 58.68 percent on Dec. 31, 2015. Debt to equity ratio was at 3.97 as on Dec. 31, 2016, up from 2.83 as on Dec. 31, 2015. Interest coverage ratio improved to 0.66 for the quarter from 0.50 for the same period last year.
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