What happened

Shares of Frontier Communications (NASDAQ:FTR) fell as much as 11.3% in Tuesday's morning session.

So what

The regional telecom reported fourth-quarter results Monday night. The report fell short of analyst expectations on both the top and bottom lines, and subscriber counts declined even in the broadband access segment.

Bundle of fiber optic cables.

Image source: Getty Images.

Now what

On the upside, Frontier expects to double or triple its free cash flows in 2017, compared to the $316 million seen in this report for the full fiscal year of 2016. That should leave plenty of headroom to keep Frontier's generous dividends intact, though I'd be surprised to see a dividend increase.

Management also laid out plans for a reverse split, to be approved at the annual meeting in May. Reverse splits are rarely welcomed by investors, because they are often seen as a desperate attempt at meeting listing requirements based on share prices. It's hardly a management vote of confidence in Frontier's ability to keep share prices stable or rising in the near future.

The stock has now plunged 46% lower in the last 52 weeks, so maybe some desperation is called for at this point. That being said, if Frontier's cash flows catch fire along the lines just described by management, a bouncing stock shouldn't be far behind. So if you trust Frontier's leadership at its word, you might want to pick up a few shares today.

On the other hand, I'm quite content to stay away -- based on what the company is actually doing. Subscriber losses plus desperate accounting moves should not equal rising cash flows in the long run.