Q2/2010 Earnings: Frontier, Qwest, and Soon CenturyLink

August 4th, 2010 by · 2 Comments

It's the march of the big rural ILECs this morning.

In the wake of its takeover of all those rural Verizon assets, the details of Frontier Communications (NYSE:FTR, news, filings) performance in Q2 aren't all that relevant.  Nevertheless, revenues of $516M were somewhat stronger than expected, though of course that was down from $532M in the same quarter last year due to those ever-present landline declines.  Not including some $37M in acquisition costs, Frontier earned $0.19 per share, also ahead of expectations.  But next quarter's results will be so vastly different that it hardly matters - revenues should triple while $3.5B in debt will land on the balance sheet along with all those newly issued shares.

q also had a reasonably good quarter, checking in with revenues of $2.93B.  That's down 5.2% from the same quarter last year and 1.2% from the first quarter, yet still slightly ahead of expectations.  Earnings of $0.09 per share seem to be in line.  One interesting item was the completion of fiber-to-the-tower projects for some 600 cell sites so far, with 2000 targeted by the end of the year.  Qwest maintained guidance, projecting revenue declines to improve to a 'low to mid single digit rate' by the end of the year.  Full year EBITDA will be $4.3-4.4B.  All in all, few surprises here.

Later this morning Qwest's prospective acquirer,CenturyLink (NYSE:CTL, news, filings), will also report and likely will not surprise anyone either.  Revenues are expected to be about $1.77B, declining 1.6% from the prior quarter.  Analysts expect earnings per share of $0.85.  Judging by the results of Frontier and Qwest, it seems unlikely they will be too far out of line. UPDATE: $1.77B and $0.88, as with the other two CenturyLink came just a tad above expectations.

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Categories: Financials · ILECs, PTTs

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