Frontier Communications Parent Reports Mixed Revenue Trends, Net Income Decline in Q3 2024

Frontier Communications Parent, Inc. reported its financial results for the nine months ended September 30, 2024, highlighting a challenging period marked by significant changes in revenue and profitability compared to the previous fiscal year. The company recorded a net income of $1 million, a decrease from $3 million in the same period of 2023. Total equity as of September 30, 2024, was $5,066 million, down from $5,240 million a year earlier.

Revenue trends showed a mixed performance across different service categories. Data and internet services revenue increased by 12% to $1,004 million for Q3 2024, and by 11% to $2,934 million for the nine-month period. This growth was driven by a 22% increase in consumer fiber broadband revenues, attributed to higher average revenue per user (ARPU) and net customer additions. However, voice services revenue declined by 12% to $301 million for Q3 and by 11% to $934 million for the nine months, primarily due to customer losses and reduced bundling of voice services. Video services also faced a 20% decline in revenue, reflecting ongoing customer attrition.

Operating income for the nine months ended September 30, 2024, was $267 million, down from $372 million in the prior year, largely due to increased depreciation and amortization expenses, restructuring costs, and higher selling, general, and administrative expenses. Restructuring charges totaled $88 million, significantly higher than the $48 million recorded in the same period of 2023.

Frontier's strategic developments included a merger agreement with Verizon Communications Inc., announced on September 4, 2024. Under the terms of the agreement, Frontier will become a wholly owned subsidiary of Verizon, with shareholders receiving $38.50 per share. The merger is expected to close by the first quarter of 2026, pending regulatory approvals and other conditions.

The company also reported a significant increase in capital expenditures, totaling $1,991 million for the nine months, down from $2,882 million in 2023. This reduction reflects lower levels of build prework and materials purchases. Additionally, Frontier's liquidity position improved, with approximately $1,980 million available, including $1,320 million in cash and cash equivalents.

As of September 30, 2024, Frontier had approximately 3.1 million broadband subscribers and continued to expand its fiber network, passing over 7 million locations. The company aims to reach 10 million locations as part of its growth strategy. Despite the challenges faced, Frontier's focus on fiber broadband services is expected to drive future revenue growth as it transitions away from lower-margin copper services.