What happened

Shares of Frontier Communications (OTC:FTR) are plunging today, down 15% as of 12:37 p.m. EDT, reversing yesterday's 7% gain.

So what

The regional American telecom reported a mixed bag of second-quarter results ahead of the Wednesday surge. Analysts had been expecting a $0.91 net loss per share on revenue near $2.3 billion; Frontier hit the sales target but fell short of the Street's earnings projections with a $1.10 loss per share. Management lowered Frontier's EBITDA profit guidance for the full year from $4 billion to $3.8 billion, as expected. On the upside, Frontier CEO Dan McCarthy called the quarter an "inflection point" for his company, with better results ahead in the second half of 2017 and beyond.

That was the news behind Wednesday's surge. On Thursday, analyst firm Hilliard Lyons downgraded Frontier's stock from a neutral rating to underperform, reminding investors that the stock's earlier jump might not have much substance.

Digital screen showing a falling stock chart

Image source: Getty Images.

Now what

As positive as McCarthy's comments may have been, Frontier has a history of making big promises on which it can't deliver. For example, McCarthy promised an immediate end to declining broadband customer counts in last November's third-quarter call but followed up by losing another 91,000 broadband subscribers in the next report. In the same call, he also fought back suggestions that Frontier's generous dividend might have been headed for a large reduction. That's exactly what happened a few months later, of course.

In other words, this company doesn't know how to underpromise and overdeliver. Every time I see McCarthy claiming that Frontier's business is on the mend, I'm skeptical.

So Thursday's plunging share prices make a lot more sense than Wednesday's big jump. The stock is trading more than 70% lower so far in 2017, and for good reason.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.