Frontier Stock Slides 19% After Latest Credit Downgrade by Moody's; Consolidated Also Drops
Frontier Communications' stock plummeted again Friday, closing down 19 percent and leaving it with a market capitalization of just $582 million. Thursday, Moody's Investors Service downgraded Frontier's speculative-grade credit rating from B2 to B3, making it six notches below investment…
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grade. "Frontier continues to face revenue and EBITDA pressure, although subscriber trends have improved sequentially within its acquired California, Texas and Florida (CTF) markets," said a release Thursday. "Yet, the legacy Frontier business has remained weak over the past five quarters with sharp broadband subscriber losses in each period. Although the business is starting to show signs of stabilization, the trends remain negative. Moody's expects Frontier's EBITDA and cash flow to continue to decline into 2018." Moody's also downgraded Frontier's "probability of default" rating and said its outlook remains negative. Frontier didn't comment Friday. Consolidated Communications' stock dropped 11 percent Friday after the company reported Q3 results, but Raymond James analysts kept their "strong buy" recommendation and Well Fargo analysts kept their "outperform" recommendation.