Frontiers first year in Tri-Counties one of losses

Mar 27, 2017

Frontier Communications' first year after its acquisition of millions of Verizon broadband and Fios TV subscribers has been a rocky one. Now the company is betting on a turnaround after a $373 million net loss.

The acquisition, which closed March 31, 2016, doubled the number of customers for the Connecticut-based company, giving it territory in California, Texas and Florida that includes the Tri-Counties. But a large number of the acquired accounts simply were not paying their bills.

Efforts starting in July to resolve those accounts impacted the company's bottom line to the tune of around $45 million, President and CEO Dan McCarthy said in the company's fourth quarter and year-end earnings release. But the process is expected to finish soon, with results returning to normal by the start of the second quarter.

The company's stock has fallen 60 percent in the year since the $10.5 billion deal closed, ending at $2.11 on March 22. With a market cap of $2.42 billion, down from $6.2 billion at the time of the acquisition, Frontier was also dropped from the S&P 500 Index when it updated its guidelines March 10 to require a minimum of $6.1 billion.

In May, the company's shareholders will consider a reverse stock split, with a ratio between 1-for-10 and 1-for-25. Frontier also split into separate commercial and consumer business units as a cost-saving measure

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