The stock market rose modestly on Thursday, as Wall Street breathed a collective sigh of relief over Europe. Just a week after Japan committed to an unexpected and massive round of quantitative easing, European Central Bank President Mario Draghi reassured the public that the ECB will continue its loose money policies indefinitely.
While Draghi’s comments helped put the three major U.S. indices in the green today, shares of Windstream (WIN), Prudential Financial (PRU), and Frontier Communications (FTR) each ended emphatically in the red.
Shares of Little Rock-based telecom Windstream took a beating on Thursday, shedding 7.8% after missing on third-quarter earnings. Today’s horrendous performance, however, still doesn’t negate WIN stock’s great 2014, a year that’s seen shares gain more than 21% to date.
The company’s revenue of $1.46 billion came in below Wall Street expectations for $1.47 billion in the quarter, and Windstream’s profits are also expected to be under pressure as the company increasingly focuses on lower-margin services.
Shares of life insurance giant Prudential Financial also slumped big time on Thursday, losing 4.4% after third-quarter earnings missed consensus estimates by a mile. Although revenue came in at $11.77 billion and handily beat calls for $11.02 billion in the period, earnings per share of $2.20 didn’t come close to hitting Wall Street’s $2.41 EPS target.
The net income miss — profits were halved from the same period a year ago — came as a result of losses from derivatives. PRU stock is now down 7.8% on the year.
Frontier Communications (FTR)
Lastly, shares of Frontier communications also lost big ground today, dropping 3.7%. The last few days have been an absolute roller coaster for FTR stock and its shareholders, as shares fell sharply and then rebounded, only to fall again. Although the company beat EPS estimates by a penny on Tuesday, Wall Street can be a fickle place, and the telecom sector was firmly out of favor today following Windstream’s miss.
While telecom certainly isn’t the sector you’d want to get behind in a “risk-on” type of environment, its dividend yield is absolutely mouth-watering. While Frontier’s yield has fallen since October 14 — when it was declared one of the Top 10 S&P 500 Dividend Stocks for October — FTR stock still rewards investors to the tune of 6.3% at current price levels.
If you can be a patient long-term investor, FTR is still an attractive buy, especially considering the consolidation inherent in telecom. Anyone who’s been invested for all of 2014 knows the type of rewards that one can reap from some patience: FTR stock is up 36% year-to-date.
As of this writing John Divine held no positions in any of the stocks mentioned. You can follow him on Twitter at @divinebizkid.