Frontier Communications Corp. surged the most in a year after the company raised estimates for both capital spending and free cash flow.
The stock increased 9.1 percent to close at $5.15 in New York, the biggest gain since July 2014. The shares have dropped 22 percent this year.
Frontier, based in Stamford, Connecticut, updated its outlook to take into account federal subsidies it will receive to deploy broadband Internet services in rural areas. The company now expects free cash flow in 2015 of $825 million to $865 million, after previously forecasting $785 million to $825 million. It also expects capital expenditures of $700 million to $750 million, up from an earlier outlook of $650 million to $700 million.
As for second-quarter revenue, the company reported second-quarter revenue of $1.37 billion, beating the $1.36 billion projected by analysts, according to an average of estimates compiled by Bloomberg. Frontier’s earnings per share excluding some items was in line with analysts’ estimates at 3 cents.