Frontier Communications Corporation (NYSE: FTR) is paying a price for its earnings report decision. As the stock screened out with an unusually high double-digit dividend yield, it was one which could not likely be sustained. The new rate is $0.10 per share per quarter, generating a dividend yield of almost 9%, and the prior payout was $0.1875.
The company called it the strongest revenue growth since closing an acquisition and cash flow for 2011 was $1.1 billion. Normalized earnings came in at $0.07 EPS or $69 million outside of one-time costs. Revenue for the fourth quarter of 2011 was $1.283 million as compared to $1.29 billion in the prior fourth quarter. Thomson Reuters had estimates of $0.05 EPS on $1.27 billion in sales.
Here is the customer roster:
- 3,103,800 residential customers
- 309,900 business customers
- grew high-speed internet customers by 9,300 to 1,764,200
- 557,500 video customers
Shares of Frontier closed up 3.5% on the day but the stock is down over 5% at $4.22 in the after-hours session. Its 52-week trading range is $3.81 to $9.48,
Cutting a dividend is rarely good, but investors probably were expecting a cut of some sort.
JON C. OGG
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