Q2/2010 Earnings: Frontier, Qwest, and Soon CenturyLink

It’s the march of the big rural ILECs this morning.

In the wake of its takeover of all those rural Verizon assets, the details of Frontier Communications (NYSE:FTR, news, filings) performance in Q2 aren’t all that relevant.  Nevertheless, revenues of $516M were somewhat stronger than expected, though of course that was down from $532M in the same quarter last year due to those ever-present landline declines.  Not including some $37M in acquisition costs, Frontier earned $0.19 per share, also ahead of expectations.  But next quarter’s results will be so vastly different that it hardly matters – revenues should triple while $3.5B in debt will land on the balance sheet along with all those newly issued shares.

q also had a reasonably good quarter, checking in with revenues of $2.93B.  That’s down 5.2% from the same quarter last year and 1.2% from the first quarter, yet still slightly ahead of expectations.  Earnings of $0.09 per share seem to be in line.  One interesting item was the completion of fiber-to-the-tower projects for some 600 cell sites so far, with 2000 targeted by the end of the year.  Qwest maintained guidance, projecting revenue declines to improve to a ‘low to mid single digit rate’ by the end of the year.  Full year EBITDA will be $4.3-4.4B.  All in all, few surprises here.

Later this morning Qwest’s prospective acquirer,CenturyLink (NYSE:CTL, news, filings), will also report and likely will not surprise anyone either.  Revenues are expected to be about $1.77B, declining 1.6% from the prior quarter.  Analysts expect earnings per share of $0.85.  Judging by the results of Frontier and Qwest, it seems unlikely they will be too far out of line. UPDATE: $1.77B and $0.88, as with the other two CenturyLink came just a tad above expectations.

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Categories: Financials · ILECs, PTTs