Frontier Communications Corp. posted first-quarter revenues of $2.36 billion, an improvement over first-quarter 2016’s revenues of $1.36 billion. The big news, however, was its announced cut to its quarterly dividend from $0.105 per share to $0.04 per share, a 62 percent reduction.
“This change allows for reallocation of approximately $300 million annually, increasing to approximately $400 million annually in the second half of 2018 following the conversion of the mandatory convertible Series A Preferred Stock to common stock,” the Norwalk-based company said. “Frontier plans to use these proceeds primarily to repay debt, with the goal of lowering the leverage ratio from 4.39x to 4.0x by the end of 2019, and 3.5x by the end of 2021.”
According to President and CEO Dan McCarthy, “During the quarter, we continued to realize our targeted efficiencies and synergies, and I am also pleased to have achieved our third consecutive quarter of improved FiOS gross additions in the California, Texas and Florida markets. We are executing on a number of initiatives with the goal of enhancing customer experience, reducing churn, stabilizing revenues and generating cash flow.”
Frontier achieved its previously announced target of annualized cost synergies of $1.25 billion as of the end of the first quarter and remains on track to achieve an incremental $350 million in annual savings by midyear 2018, it said.