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Frontier Communications Corporation Message Board

  • WJJ_7 WJJ_7 Feb 16, 2012 4:57 PM Flag

    Dividend cut best for Co.

    I don't think anyone knows whether Maggie knew that the board wanted to cut the dividend when she promised that it would not be cut. Even if she did know, the dividend cut is the best thing for the company and stock holders. If she would have announced they were cutting the dividend without having the benefit of a strong quarterly earnings report the stock would have tanked. At least now, the excellent report will buffer some of the loss. Lowering the dividend was absolutely the right thing to do for the long term health of the company. I plan to hold this stock for a long time, and I support the board's decision.

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    • yeah but she lied just like all execs and u should know that management controls the board the boards do not represent shareholders

    • The dividend cut could benefit us (longs) once S&P steps back in and re-evaulates the situation and debt. Their negative remarks helped drive the price down. According to the press conference, S&P should make another statement in the coming days (which should be positive). If that news gets us 30 cents back on the stock, well, there's your make up for the dividend cut.

    • Her compensation should be cut????

      Cut to 0 as she is made available to the workforce.

      I have no patience for a manager that can't see exactly what is happening to the company and without regard to the investing public makes a commitment to the dividend when the credit situation was already unraveling.

      They had multiple calls well before Q3 with the credit agencies, everyone saw the same thing and she insisited that things were about to turn. After a few Qs in 2011 they should have known that they were ready to take some medicine with a div cut. They should have known better.

    • ur insulting the intelligence of everyone on this board.

      • 1 Reply to c1smittycc
      • I bought in this week. Having done my due diligence I thought there was a fairly good chance that the dividend would be cut.

        If you go back & listen to the December conference presentation, the host asked Maggie if the dividend was safe. Maggie replyed that the board meets every quarter & would decide at that time. She did not say at that time that the dividend was safe. That's the clue that was there for every investor not just me.

        Having the dividend cut will take the uncertainty out of the stock & a sustainable 9% dividend is hard to come by. If the stock sells off tomorrow I will double down. glta

    • Bottom Line - FTR board & CEO Over Paid for the Verizon merger plain and simple.
      They bought a Cat in a Bag. Makes you wonder if this was planned from the very
      beginning that the shareholders would be screwed in end with a debt ridden company. Yes I believe the current management are responsible and should be shown the door, the sooner the better!

    • If you figure that she herself owns over a million shares, she is in a sense taking a pretty big hit.

    • shareholder_in_residence shareholder_in_residence Feb 16, 2012 7:43 PM Flag

      I agree, she did not deal with her statments that the divvy was "safe". Totally passed over that.

      While I think she is trying to do the right thing, I ALSO AGREE that since she misled investors, her COMPENSATION should be CUT in line with the divvy cut. Until it is RESTORED.


    • perhaps the board had to cut the dividend to keep from possible credit downgrades by Moody's,S&p and Fitch.We don't know whether Frontier will need to go to the bond market in the near future and their credit rating helps determine rates. I agree those whose cost basis is $8+ took a beating-but dividend remains and the savings we are told will be used to reduce debt.That is also a +.I wish the dividend had been cut from.25 directly to .10 and it spelled out to us what the reduction would accomplish. I like my dividends also but am long term investor. Being optimistic let's hope next spring it goes up a penny, then another,etc. Thanks

    • swp3 Feb 16, 2012 5:13 PM Flag

      Good analysis can reinstate when debt is manageable.

    • Absolutely agree. By cutting the dividend to $0.40, that frees up about $350 mill of cash, which is 35% of their $1 bill FCF run rate, that is very significant.
      Their rev trends improved, their synergies are tracking ahead of expectations, and now they have a lot of extra cash to provide cushion rel to debt maturities.
      Now at around $4, you have a 10% yielding company with a sustainable dividend...the benefit of the big cut is that it makes it more sustainable.
      I think if they reiterated the divi, maybe there would be a relief rally that would make day traders happy, but that dividend would continue to be cement blocks tied to their ankles and stock would still have a massive overhang.
      Now that is no longer the case, short interest has spiked, stock is on its behind...I think it is a great set up here.

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