Frontier Communications (FTR, Financial) yet again posted strong results for the recently reported quarter. The company is now pleased to see growth in the revenue sequentially in both its residential segment and business. The company’s operational excellence and efforts seems to be paying off for it. Frontier is now focusing on improving its performance in the coming quarters on various initiatives. It has made several moves including acquisition as a strategy in the past which helped it to see handsome synergies in the recently reported quarter. Further, Frontier is focusing on various initiatives to drive its profitability.
Making the right moves
The company is pleased with the acquisition for Connecticut. The acquisition had delivered handsome synergies of about $200 million which is ahead of what it expected achieve in the next three years. Further, this acquisition has helped the emerging markets of the company to perform well and the company is now expecting further synergies to accumulate in the future. In addition, Frontier is also expanding its strategic relationship with Intuit (INTU, Financial). With this, the company will be in a position of providing premium technical customer service support to its U.S.-based Frontier Secure support services for various products such as QuickBooks online, QuickBooks desktop. Payment and payroll products. This will help Frontier to reach new levels of profitability in the coming quarters, driving its revenue high.
Another catchy point in the company can be its dividend payout. However it is the lowest in the industry as of now, but its relentless focus on customers, revenue growth and expenses will result in maintaining a sustainable dividend. After the completion of Connecticut acquisition, frontier is expected to improve its dividend pay-out. Frontier is also working closely with AT&T and working hard to maintain the customer base and high quality network operation. This co-ordination between the two companies is commendable and will help both to improve their performance in term of profitability.
Growth-focused moves
Frontier is also undertaking aggressive marketing strategies which are expected to continue for several months. With this Frontier wants to make customers aware of Connecticut to Frontier packages, products and local engagements. With all such efforts are expected to help Frontier to implement effective cost structure foundation.
Frontier is counting on its attractive portfolio and is expecting them to attract more customers and strengthen the company’s position in the market. Its Frontier Secure and internet of things portfolio in Connecticut are already capturing a good market and are further expected to help Frontier to build out robust competitive high speed broadband capabilities. As the customers are shifting towards the booming internet of things and the usage of internet is growing, Frontier finds strong growth opportunities in the future as well.
In the Connecticut market, Frontier has already working on with the low cost strategy keeping the overall cost low. The company is expected to take much market share in these regions as they represent low cost affairs in terms of deployment costs. Frontier is looking at this profitable opportunity and is working in various ways to get hold of it.
With Connecticut, Frontier will be focusing on driving the synergies further. This will be supported by a strong cost structure as well as additional cost reduction initiatives by the company. This will add more value to its growth strategy and it will lead it to better delivery of financial results in future.
Conclusion
All in all, Frontier's performance can improve in the long run. The company is making good moves, and investors should take a look at it from a long-term perspective.
