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Frontier Communications lost $80 million in quarter it took over Verizon services in Tampa Bay

A Frontier flag flies outside the Frontier regional office in Tampa shortly after the company took over some Verizon services in April. [MONICA HERNDON | Times]
A Frontier flag flies outside the Frontier regional office in Tampa shortly after the company took over some Verizon services in April. [MONICA HERNDON | Times]
Published Aug. 2, 2016

Frontier Communications reported a net loss of $80 million for its second quarter, ending June 30, the first reporting period to reflect the company's $10.5 billion takeover of Verizon's landline, internet and cable operations in Florida, Texas and California.

Executives on an earnings call did not directly address problems relating to the April 1 takeover in Florida, where thousands of complaints about loss of services prompted the state Attorney General's office to intervene.

Chief executive Dan McCarthy said Monday that Frontier is "effectively done" with the absorption of Verizon clients and going forward, the company may experience "lingering small things, but nothing creating the kind of noise created when we first cut over."

Customers blistered Frontier on social media and other channels after experiencing widespread trouble following the April 1 acquisition. Attorney General Pam Bondi's office received 1,675 complaints about Frontier in May and 502 in June, prompting Bondi to have investigators in the Tampa Consumer Protection Division contact the company daily.

A spokesman later said Frontier has made "good progress."

The company said Monday it experienced "only a slight elevation in disconnects as a result of the transaction." New additions lagged, but Frontier said that was because it suspended marketing during the second quarter to focus its efforts on supporting customers in Florida, Texas and California.

"We are very pleased with the performance of our newly acquired assets and our achievement of annualized cost synergies of $1 billion in the second quarter," McCarthy said.

The $80 million net loss equaled 7 cents per share. Analysts were expecting 3 cents per share.

The company reported revenue of $2.6 billion in the second quarter, up from $1.3 billion in the same period last year, reflecting the massive Verizon deal. Frontier reported operating income of $311 million, up from $193 million last year.

The Verizon deal raised customer levels to 5.2 million in the quarter, from 3.2 million last year. Average monthly residential revenue per customer was $83.20, up from $64.43 a year ago.

The company said it will continue its broadband upgrade, adding 50-megabyte service to an additional 1.5 million households over the next year.

Contact Jerome R. Stockfisch at jstockfisch@tampabay.com. Follow @JStockfischTBT