Frontier Q2 Revenue Down, but Verizon Line Integration Process Is on Track
With one year since the acquisition of Verizon's (NYS: VZ) rural lines now under its belt, Frontier Communications (NYS: FTR) reported that while revenue in the second quarter of 2011 dipped to $1.3 billion, that figure was up from $516.1 million in Q2 2010.
Frontier attributes the year-over-year revenue increase to the $825.3 million in revenue it got from the Verizon line acquisition.
However, Frontier's revenue gains were offset by a $19.2 million drop in its legacy operations.
"The one year anniversary of Frontier's transformational acquisition demonstrated a solid turnaround in operations and improved profitability," said Maggie Wilderotter, Chairman & CEO of Frontier. "Our broadband network has now been expanded to 466,000 new homes, a rich opportunity that we're only beginning to penetrate, and our business revenue pipeline is solid across all market segments. We have achieved $424 million of annualized cost savings and are increasing our target to $600 million."
Here is a breakdown of Frontier's key performance metrics:
Looking forward to Q3 and the rest of 2011, Frontier's ongoing focus will continue to be on three key areas: network integration of the former Verizon properties, expanding broadband, and finding a way to stem FiOS losses due to its desire to opt out of the TV business in Indiana, Oregon and Washington.
From an integration point of view, the service provider reported that its first four states are on track to be completed by the end of this year and have begun the planning process to convert the remaining nine states in 2012.
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