Aug. 1 (Bloomberg) -- Frontier Communications Corp.’s bonds rose after the phone company reported second-quarter earnings that beat analyst estimates.
Frontier’s $945.3 million of 9 percent notes due August 2031 climbed 2.25 cents to 101.75 cents on the dollar at 2:37 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The Stamford, Connecticut-based telecommunications company said yesterday in a statement that adjusted net income for the three months ended June 30 was $75.3 million, or 8 cents a share, more than the 5 cent estimate of 16 analysts surveyed by Bloomberg.
Frontier, which sells voice and broadband service to individuals and businesses, has reported declining sales for seven straight quarters after it purchased Verizon Communications Inc.’s local wireline business in 14 states for more than $8 billion. The 1 percent drop in revenue in the second quarter from the previous three months was less than investors expected, according to Anna Basanskaya, an analyst for CreditSights Inc. in New York.
“The rate improved even though the company guided that this would be a cleanup quarter and it wouldn’t do anything aggressive until the end of year,” Basanskaya said in a telephone interview.
Sales fell to $1.26 billion in the three months ended June 30 from $1.27 billion in the first quarter, according to data compiled by Bloomberg. Revenue was $1.4 billion in the third quarter of 2010.
Frontier is showing signs of cost savings after completing a network upgrade, Scott Dinsdale, an analyst at Montpelier, Vermont-based KDP Investment Advisors Inc., wrote today in a report. Investors will be watching to see if the telecommunications company can add broadband Internet customers, he wrote.
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