FYBR - Frontier leans on fiber broadband boosts cost savings targets

Frontier Communications ( NASDAQ: FYBR ) produced revenue in line with expectations and boosted its expectations for cost savings in a third-quarter earnings report where it topped profit forecasts.

Revenues fell 8.4% as expected, to $1.44B. The bright spot was consumer fiber broadband, which softened a collapse in subsidy revenue and declines in video, voice and wholesale. (On subsidy revenue, which slid 78%, CAF II funding expired at the end of Q4 2021.)

Excluding the subsidy impact, revenue fell 4.5% year-over-year, am improved rate of decline from last quarter.

“Our team set a new pace for building and selling fiber this quarter," said CEO Nick Jeffery. "At the same time, we radically simplified our business and delivered significant cost savings ahead of plan. This is a sign of a successful turnaround."

The company built fiber to a record 351,000 locations to bring its total footprint to 4.8M - nearly halfway toward a target of 10M fiber locations. And it added a record 66,000 fiber broadband custoemrs (a year-over-year growth rate of 15.8%).

On the earnings call, Chief Financial Officer Scott Beasley touted improvements in cost savings, saying "the opportunity has increased ... We now see a runway to $400 million by the end of 2024."

"We will continue to reinvest a portion of these savings into initiatives that accelerate top line growth, while a portion will flow directly into improved margins," Beasley said.

Revenue breakout (pro forma): Data and Internet services, $848M (up 1.7%); Voice services, $369M (down 10.2%); Video services, $127M (down 14.8%); Other, $82M (down 17.2%); Subisdy and other, $18M (down 78.3%).

For more detail, dig into Seeking Alpha's transcript of Frontier's earnings call .

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