SAN FRANCISCO (AP) ¿ An analyst with Standard & Poor's has downgraded the firm's ranking on telecommunications company Consolidated Communications Holdings Inc. because of a belief that the loss of phone-line customers will erode sales.
S&P analyst Todd Rosenbluth wrote in a research note Monday that the firm was downgrading Consolidated Communications Holdings' ranking to "Sell" from "Hold."
Rosenbluth wrote that he believes the Mattoon, Ill.-based company will benefit from its video and Internet offerings but that future losses of phone-line customers will hurt the company's revenue. He wrote that even though the company has enough cash to support paying a 10.8 percent dividend yield, he views the stock as overvalued.
On August 6 the company reported second-quarter earnings of $7.5 million, compared with $180,000 a year ago, as sales fell 4 percent to $102 million.The company's total local access lines fell to 254,593 as of June 30, a decrease of 22,200, or 8 percent, at the same time the year before. The shares rose 1 cent to $14.36 in afternoon trading. The stock has risen about 80 percent since a low of $7.90 in March.