Frontier Communications yesterday reported lower revenue and a $5.45 billion goodwill impairment charge, and it warned investors that its revenue will continue to decline in future quarters.
Frontier’s financial performance is so bad that the company said it wouldn’t take any questions from investors during its quarterly earnings call yesterday. Frontier reported second-quarter revenue of $2.07 billion, down from $2.16 billion in Q2 2018 and $2.1 billion in Q1 2019. Frontier also reported a net loss of $5.32 billion, though this was due to the goodwill impairment charge.
Goodwill is the fair market value of a company, excluding its assets. Frontier said its goodwill impairment of $5.45 billion is due to “our expectation of continued revenue declines because of pressures on the business, reduced expectations for the transformation program, the long-term sustainability of our capital structure, a lower outlook for our overall industry, and the cumulative impact of all these factors on business trends going forward.” Frontier said its goodwill balance is now just $276 million, “and further impairments are possible as a result of ongoing reviews of the business and operations.”