Shares of Frontier Communications Corp. plunged 11% toward a 34-year low in very active morning trade Wednesday, after the communications services company reported a wider-than-expected first-quarter loss, slashed its dividend and set terms of its proposed reverse stock split. Volume ballooned to 60.1 million shares, compared with the full-day average of 43 million shares. Frontier reported late Tuesday a per-share loss of 8 cents, wider than the FactSet per-share loss consensus of 6 cents. The company cut its quarterly dividend by 62% to 4 cents a share from 10.5 cents a share, and said it will set the reverse stock split at 1-for-15. The company had approved the reverse split in March, subject to shareholder approval in May, but at the time said it would be set between 1-for-10 and 1-for-25. Raymond James analyst Frank Louthan IV reiterated his outperform rating, saying the expected dividend cut removes an overhang on the stock, and that the value of Frontier’s fiber-based network assets is “much higher” than what current stock prices suggest. The stock has plunged 49% year to date, while the iShares U.S. Telecommunications ETF has lost 3.5% and the S&P 500 has gained 6.5%.
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