Oh no, don't do that to Tiger. Since Frontier signed Corey Pavin back when he was the PGA's leading money man about 14 months ago to a mulityear deal, he hasn't done squat--come to think neither has Frontier. A perfect match for each other.
Seriously folks, this could be the "Mother of All Buys" right now. May 2nd, in Denver, is the next shareholders meeting. The current CEO will be history by the end of it; as he should be. He has placed crappy management in highlevel positions throughout the company. This company has not been anywhere near sales driven but rather administatively driven. As a result you have seen some of the most ridiculous sales figures in the industry and, while the other major players have reduced cost per minute, increased sales and EPS, Frontier has not sharpened their pencil.
In addition, the last 2 quarterly earnings have been crap along with multi-multi million dollar "one time" write offs.
Good news is the following: -Annual revenues of about 3B. -In the process of a building the worlds most advanced SONET (7 rings nationally) fiber optic network capable of carrying all long distance and data traffic in the US. Initial leg, LA to NY, to be completed by end of 1997. When network completed in 1998, it will be the worlds most advanced network and its' fiber will total over 14,000 miles nationally. Frontier's net cost per minute may be the lowest in the US (retail and carrier sales should have a field day). Lucent Technology is providing the fiber and Quest out of Denver is doing the buildout. This is a $2B project and Frontier is putting up $500M. This is big time. -Agressive new pricing due out in June. Should help sales substantially. -National Frame Relay network due out in July (yeah, about time). -New CEO due by mid-May (that is if he is voted out on May 2nd and I think it will happen) and new mgmt to follow.
At $16 per share, this company is ripe for acquisition by an RBOC or little independent like GTE ("little" is meant as humor). Frontier has an excellent existing national switching network and currently owns fiber in several areas throughout the US. With deregulation and RBOC's and independents looking to sell long distance today, why attempt to buildout your own network when this one is so ripe (and damn cheap)for the picking? Go get 'em GTE.
That's my take. S. |
