Julianne Neathery: Frontier Communications Third Quarter Earnings Sneak Peek

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S&P 500 (NYSE:SPY) component Frontier Communications (NYSE:FTR) will unveil its latest earnings on Thursday, November 3, 2011. Frontier Communications provides telecommunications services to rural areas and small and medium-sized towns and cities.

Frontier Communications Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 6 cents per share, a decline of 25% from the company?s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 7 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 6 cents during the last month. For the year, analysts are projecting net income of 24 cents per share, a decline of 35.1% from last year.

Past Earnings Performance: The company has fallen in line with estimates the last two quarters. In the second quarter, it reported profit of 6 cents per share and two quarters ago booked net income of 6 cents.

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Wall St. Revenue Expectations: On average, analysts predict $1.3 billion in revenue this quarter, a decline of 7.1% from the year ago quarter. Analysts are forecasting total revenue of $5.25 billion for the year, a rise of 38.2% from last year?s revenue of $3.8 billion.

Analyst Ratings: Analysts are bullish on this stock with seven analysts rating it as a buy, one rating it as a sell and five rating it as a hold.

A Look Back: In the second quarter, profit fell 8.1% to $32.3 million (3 cents a share) from $35.1 million (11 cents a share) the year earlier, meeting analyst expectations. Revenue rose more than twofold to $1.32 billion from $516.1 million.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past four quarters. Over that span, the company has averaged growth of more than twofold, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose more than twofold from the year earlier quarter.

The decrease in profit in the second quarter broke a streak of two consecutive quarters of year-over-year profit increases. Net income rose 28.5% in the first quarter and 944.6% in the fourth quarter of the last fiscal year.

The company upped its gross margin by 6.3 percentage points in the in the second quarter. Revenue rose 156.2% while cost of sales rose 63% to $146.9 million from a year earlier.

Competitors to Watch: AT&T Inc. (NYSE:T), Iowa Telecommunications Services, Inc. (IWA), Windstream Corporation (NASDAQ:WIN), Sprint Nextel (NYSE:S), Verizon Communications Inc. (NYSE:VZ), Telephone & Data Systems, Inc. (NYSE:TDS), Warwick Valley Telephone Co. (NASDAQ:WWVY), Otelco, Inc. (NASDAQ:OTT), Cbeyond, Inc. (NASDAQ:CBEY), Cincinnati Bell Inc. (NYSE:CBB), and CenturyLink, Inc. (NYSE:CTL).

Stock Price Performance: During September 1, 2011 to October 28, 2011, the stock price had fallen 85 cents (-11.9%) from $7.13 to $6.28. It saw one of its worst periods between August 31, 2011 and September 9, 2011 when shares fell for seven-straight days, falling 6.4% (-47 cents) over that span. The stock price saw one of its best stretches over the last year between January 28, 2011 and February 8, 2011 when shares rose for eight-straight days, rising 4% (+34 cents) over that span. Shares are down $2.77 (-30.6%) year to date.

(Source: Xignite Financials)

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