Frontier Communications Beats Q2 Despite Decline In Q2 Video, Voice Services

Frontier Communications Parent, Inc FYBR reported a second-quarter FY22 revenue decline of 8.7% year-on-year to $1.46 billion, marginally beating the consensus of $1.45 billion.
The growth in consumer fiber broadband was offset by declining subsidy, video, voice, and wholesale services.
Consumer revenue was $791 million, a 2.9% decline Y/Y, and Consumer fiber revenue rose by 2.2% Y/Y to $421 million.
Consumer fiber broadband revenue increased 12.7% Y/Y to $268 million, driven by solid growth in fiber broadband customers and average revenue per customer (ARPU).
Business and wholesale revenue was $651 million, a 6.7% decline Y/Y, while the Business and wholesale fiber broadband revenue was $264 million, a 1.1% decline Y/Y.
Frontier built Fiber to 281,000 locations, bringing total fiber passings to 4.4 million. Consumer fiber broadband net adds were 50,000, resulting in fiber broadband customer growth of 13.9%.
The adjusted EBITDA margin contracted 250 bps to 36.7%, driven by revenue declines, partially offset by lower video content costs.
EPS of $0.41 beat the consensus of $0.24.
Frontier held $3 billion in cash and equivalents and generated $229 million in operating cash flow.
Outlook: Frontier sees an FY22 adjusted EBITDA of $2.05 billion - $2.15 billion (prior guidance of $2 billion - $2.15 billion) and targets Fiber builds to 1.1 - 1.2 million new locations, an increase from the previous guidance of 1 million new locations.
Price Action: FYBR shares closed lower by 1.7% at $26 on Thursday.

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