Frontdoor reports Q3 EPS 94c, consensus 54c

Reports Q3 revenue $524M, consensus $512.71M. Reports Gross profit margin expanded 760 basis points to 51% as a result of higher realized price, continued process improvement initiatives, favorable cost development, a transition to higher service fees and a lower number of service requests per customer that was partly offset by inflationary cost pressure ;Net income more than doubled to $71M; Adjusted EBITDA increased 61% to $128M…”I am thrilled with the turnaround in our financial results, which reinforces my belief in the power of this business and the actions we have been taking,” said Chairman and Chief Executive Officer Bill Cobb. “As we look forward to 2024, our main strategic objectives are focused on increasing customer acquisitions across our two brands and advancing our retention efforts. The American Home Shield brand will be relaunched early next year and will continue to concentrate on home warranties, while the Frontdoor brand is being refocused to sell on-demand home services to a larger addressable market. In short, we continue to take bold and decisive steps that will lay a strong foundation for future growth.” “Frontdoor continues to deliver significantly better than expected financial results, and we are increasing our 2023 financial outlook for the second time this year,” said Chief Financial Officer Jessica Ross. “Third quarter gross margins came in significantly better than expected as a result of the traction we are seeing from our comprehensive process improvement initiatives and higher revenue conversion. With this solid performance, we are stepping up our share repurchase target for 2023 as we continue to generate strong cash flows and remain focused on returning excess cash to investors.”