By Kristin Jones Frontier Communications Corp.'s (FTR) second-quarter earnings fell 44% as the regional telecommunications company reported heavy one-time costs and fewer residential and business customers. However, revenue and adjusted earnings beat Street expectations and the company's operating margin improved. Shares jumped 5.1% in after-hours trading to $4.12. Through the close, the stock was down 24% so far this year, and hit its lowest levels since the mid-1980s last month. Frontier roughly tripled its size in 2010 after buying 4.8 million rural landlines from Verizon Communications Inc. (VZ). The acquisition drove four straight quarters of triple-digit revenue growth. But over the past year, that trend has reversed, as a decline in residential and business subscribers has nudged revenue and income lower. In the latest quarter, Frontier reported a profit of $18 million, or two cents a share, down from $32.3 million, or three cents a share, a year earlier. The latest quarter included a loss on the early extinguishment of debt of $70.8 million and integration costs of $28.6 million. Excluding these and other items, per-share earnings rose to eight cents from six cents. Revenue decreased 4.8% to $1.26 billion. Analysts polled by Thomson Reuters had recently expected per-share earnings of five cents a share on revenue of $1.24 billion. Operating margin widened to 21.3% from 18%, as operating expenses fell 8.6%. As of June 30, Frontier had 2.98 million residential customers, down 8.4% from a year earlier. The company had 9.3% fewer business customers, at 296,500. Write to Kristin Jones at kristin.jones@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires
