UPDATE: Frontier Communications Q4 Profit Misses Expectations

reported weaker-than-expected earnings for the fourth quarter. The Stamford, Connecticut-based company posted quarterly net income of $14 million, or $0.01 per share, compared to $68 million, or $0.07 per share, in the year-ago period. Excluding one-time items, the company earned $0.04 per share, missing analysts' estimates of $0.05 per share. Its revenue rose 13% to $1.33 billion, versus analysts' expectations of $1.34 billion. Customer revenue climbed 18% sequentially to $1,202 million in the latest quarter. At December 31, 2014, Frontier Communications had 3,214,800 residential customers, 304,700 business customers, 2,373,900 broadband customers and 586,600 video customers. Excluding the impact of the Connecticut Acquisition, Frontier Communications added 21,900 net broadband customers during the quarter. Network related expenses rose to $320 million from $262 million in the year-ago quarter, while selling, general and administrative expenses increased to $301 million from $255 million. Operating income margin narrowed to 13.0% from 21.8% in the year-ago quarter. "Connecticut operations are off to a great start," said Dan McCarthy, President and COO. "During the quarter we began executing on our plans to simplify processes, eliminate redundancies and further reduce the cost structure while improving service to customers. Our annualized cost savings now total $165 million, and we will continue driving further efficiencies as we progress through 2015." The company projects 2015 free cash flow of $785 million to $825 million. Frontier Communications shares gained 1.71% to $8.33 in after-hours trading.