Most major telecom and wireless players, like AT&T
In its first-quarter earnings report, Citizens reported a top line affected by a loss of 43,100 access lines in the quarter. Revenue actually came in slightly ahead of last year, up 2% to $569.2 million. But after backing out two recent acquisitions and a favorable one-time settlement last year, Citizens' core revenue actually declined by 2%, as business in its traditional access services continues to soften.
On the conference call, Citizens' management noted that the depressed economy didn't appear to be causing a higher rate of cancellations for its consumer services. Macroeconomics did, however, seem to affect the rate at which customers were adding new lines to replace those typically lost in any period. Since the company still sees solid results in retaining customers, it's attributing the net loss in access lines to the higher number of homes remaining empty with inactivated lines.
On the corporate side, four major business customers did "cut some cords" for various reasons. In these cases, customers weren't necessarily opting for competitors like Quest
It's not all bad news, though. Broadband and multiservice deals that combine entertainment offerings such as DISH Network's
Overall, the negatives in Citizens' earnings are mostly countered by the positive up-selling trends that continue to deliver new revenue from broadband and video services. The tight operations and juicy dividend yield greater than 8% make Citizens an attractive stock that should do even better when the economy bounces back.
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Fool contributor Dave Mock lives next to a few empty homes himself. He owns no shares of companies mentioned here and is the author of The Qualcomm Equation. Sprint Nextel is an Inside Value recommendation. The Fool's disclosure policy still giggles incessantly when blowing bubbles in milk.