Frontier Communications Corp (NASDAQ:FTR) announced its fourth quarter and FY2016 results and released an update on its progress with wireline properties bought from Verizon in California, Florida and Texas. Dan McCarthy, the President and CEO, reported that during the quarter they achieved notable progress in positioning their firm to deliver improved customer experience and enhanced financial performance, with increased financial flexibility.
The reorganization into separate Consumer and Commercial business units will lead in a more customer-centric approach, while lowering costs and enabling efficient capital deployment. Frontier now expect yearly cost synergies of $1.6 billion to be recorded by mid-year 2018 compared to target of $1.4 billion outlined in the 3Q2016 earnings report. They anticipate $1.25 billion in synergies to be achieved by the close of 1Q2017.
McCarthy reported that performance for the fourth quarter was impacted by intensified measures to resolve bought accounts in Texas, Florida and California that they have decided to be non-paying. This procedure is almost complete, and they project to return to a usual trend by the second quarter. The CEO added that they are delighted that underlying CTF client trends improved in 4Q2016 and continue to improve in 1Q2017.
McCarthy continued that Frontier team is taking action to adapt their firm to the opportunities offered by the increased scope and scale they recently bought, to invest wisely in the operations, and to improve financial flexibility. They remain committed to offering shareholder value in the coming period, by enhancing revenue trends and managing costs to achieve healthy free cash flow and sustain quarterly common dividend via sustainable payout ratio.
In the 4Q2016, the revenue came at $2.409 billion, operating income stood at $255 million while operating margin was 10.6%. Net loss amounted to $80 million while adjusted EBITDA stood at $966 million. Adjusted EBITDA margin came at 40%