Frontier Communications: Is The Dividend In Jeopardy As A New Threat Emerges?

This is a continuation in a series of articles examining the safety of Frontier Communications’ dividend in light of recent results. Our last article, on August 8, 2011, noted results were lower than we expected but the dividend was safe. Since then FTR lowered their 2011 free cash flow projection from a midpoint of $1.175 Billion to $1.1 Billion at the Goldman Sacks conference on September 20 in part due to Hurricane Irene.
They reiterated the dividend (which is about .75B/year) is safe and secure and
they see no headwinds to change their commitment.

Recently a new threat has reared its ugly head; a lawsuit. We’ll look at the
Free Cash Flow trends, any changes to their pension obligations, and the new
threat; a possible class action lawsuit.

Free Cash Flow: Frontier (NYSE: FTR) released third quarter results on Thursday, November 3, 2011. The following table displays updated company guidance along with 2011 year to date results…….
Continue to the full article at SA


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