Verizon Communications Inc.

Ciena Corp., $15.55, symbol CIEN on Nasdaq (Shares outstanding: 99.2 million; Market cap: $1.5 billion; www.ciena.com), makes networking equipment that lets phone carriers transmit files that contain large amounts of data, like video. AT&T and Verizon are among the company’s major customers. Ciena’s shares have moved up over 35% since the end of May after the company reported better-than-expected results in its latest quarter. Excluding one-time items, Ciena earned $0.04 a share in the three months ended April 30, 2012, compared to a loss of $0.24 a share a year earlier. The latest figure was well ahead of the consensus estimate of a $0.03-a-share loss....

FORD MOTOR CO., $9.50, New York symbol F, reports that its U.S. sales rose 7.0% in June 2012, to 207,759 vehicles from 194,114 in June 2011. That was higher than the consensus estimate of a 4.4% rise. The company recently launched a new version of its Escape sport utility vehicle. That helped spur a 24.8% jump in Ford’s overall SUV sales. Truck sales rose 1.2%, while sales of passenger cars rose 0.3%. The company also warned that its overseas operations would probably lose $570 million (before taxes) in the second quarter of 2012, mainly because the uncertain European economy is hurting its sales on the continent. These businesses had a pre-tax loss of $190 million in the first quarter....

BCE INC. $42 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 775.9 million; Market cap: $32.6 billion; Priceto- sales ratio: 1.6; Dividend yield: 5.5%; TSINetwork Rating: Above Average; www.bce.ca) has 5.4 million telephone customers in Ontario and Quebec, as well as 2.1 million high-speed Internet subscribers and 2.2 million TV clients. In addition, the company’s wireless business now has 7.7 million subscribers across Canada. BCE also owns 45% of Bell Aliant (see box this page).

In the three months ended June 30, 2013, the company’s earnings fell 20.5%, to $594 million, or $0.77 a share. A year earlier, it earned $747 million, or $0.97. The drop is mainly due to non-cash losses on hedges the company uses to cut the risk of its employee stock option plans.

Revenue rose 1.5%, to $5.0 billion from $4.9 billion. Revenue from its wireline division (traditional telephone, Internet and TV; 48% of total revenue) fell 0.9%. That’s partly because more of its customers are switching to wireless service. Revenue at BCE’s wireless division (28% of revenue) rose 5.4%, thanks to strong demand for smartphones and rising mobile data use.
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VERIZON COMMUNICATIONS INC. $44 (New York symbol VZ, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 2.8 billion; Market cap: $123.2 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.5%; TSINetwork Rating: Average; www.verizon.com) continues to upgrade its high-speed wireless networks to Long Term Evolution (LTE) technology, which is up to five times faster than today’s systems. These upgrades will help Verizon profit from rising use of smartphones and new wireless services, such as video calling. The company recently added 46 cities to its LTE network and expanded coverage in 22 of the cities it already covers. This makes it the largest provider of LTE service in the U.S., serving 304 cities representing two-thirds of the population. Verizon is a buy.

VERIZON COMMUNICATIONS INC. $44 (New York symbol VZ, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 2.8 billion; Market cap: $123.2 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.5%; TSINetwork Rating: Average; www.verizon.com) continues to upgrade its high-speed wireless networks to Long Term Evolution (LTE) technology, which is up to five times faster than today’s systems. These upgrades will help Verizon profit from rising use of smartphones and new wireless services, such as video calling.

The company recently added 46 cities to its LTE network and expanded coverage in 22 of the cities it already covers. This makes it the largest provider of LTE service in the U.S., serving 304 cities representing two-thirds of the population.

Verizon is a buy.

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SARA LEE CORP., $20.13, New York symbol SLE, will break itself into two publicly traded companies on June 28, 2012. Under this plan, Sara Lee will hand out shares of one of these new companies, D.E. Master Blenders 1753 N.V., to its own shareholders. D.E. Master Blenders will consist of Sara Lee’s international coffee and tea businesses. It will be based in the Netherlands, and its shares will trade on the Amsterdam Stock Exchange under the DE symbol. Investors will receive one share of D.E. Master Blenders for each Sara Lee common share they hold. This is a tax-deferred distribution, so investors will only be liable for capital-gains taxes on their new shares when they sell them. Shareholders will also receive a special cash dividend of $3.00 a share....

FRONTIER COMMUNICATIONS CORP. $3.50 (New York symbol FTR; Income Portfolio, Utilities sector; Shares outstanding: 998.5 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 11.4%; TSINetwork Rating: Average; www.frontier.com) earned $52.5 million in three months ended March 31, 2012, down 4.0% from $54.7 million a year earlier. Earnings per share were unchanged at $0.05 on fewer shares outstanding. These figures exclude costs related to Frontier’s July 2010 purchase of traditional phone (or land line) accounts from Verizon. Revenue fell 5.8%, to $1.3 billion from $1.35 billion. That’s because Frontier continues to lose residential (down 9.2%) and business (down 5.7%) customers. However, the $0.10-a-share quarterly dividend still seems safe: the payout accounted for a moderate 39% of Frontier’s free cash flow (cash flow less capital expenditures) in the latest quarter. Frontier Communications is still a hold.

FRONTIER COMMUNICATIONS CORP. $3.50 (New York symbol FTR; Income Portfolio, Utilities sector; Shares outstanding: 998.5 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 11.4%; TSINetwork Rating: Average; www.frontier.com) earned $52.5 million in three months ended March 31, 2012, down 4.0% from $54.7 million a year earlier. Earnings per share were unchanged at $0.05 on fewer shares outstanding. These figures exclude costs related to Frontier’s July 2010 purchase of traditional phone (or land line) accounts from Verizon. Revenue fell 5.8%, to $1.3 billion from $1.35 billion. That’s because Frontier continues to lose residential (down 9.2%) and business (down 5.7%) customers.

However, the $0.10-a-share quarterly dividend still seems safe: the payout accounted for a moderate 39% of Frontier’s free cash flow (cash flow less capital expenditures) in the latest quarter.

Frontier Communications is still a hold.

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ATLANTIC TELE-NETWORK $34.48 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 15.5 million; Market cap: $534.4 million; Dividend yield: 2.7%) sells telecommunications services in rural areas and other underserved areas in the U.S., Bermuda and the Caribbean region. In the three months ended March 31, 2012, Atlantic’s revenue fell 2.8%, to $182.9 million from $194.7 million a year earlier. However, earnings jumped 107.3%, to $9.3 million, or $0.60 a share, from $4.5 million, or $0.29 a share. In April 2010, Atlantic bought over 800,000 wireless accounts from Verizon Wireless for $200 million. These subscribers were mostly in rural parts of Georgia, Illinois, Ohio, Idaho and the Carolinas....

ATLANTIC TELE-NETWORK $34.48 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 15.5 million; Market cap: $534.4 million; Dividend yield: 2.7%) sells telecommunications services in rural areas and other underserved areas in the U.S., Bermuda and the Caribbean region.

In the three months ended March 31, 2012, Atlantic’s revenue fell 2.8%, to $182.9 million from $194.7 million a year earlier. However, earnings jumped 107.3%, to $9.3 million, or $0.60 a share, from $4.5 million, or $0.29 a share.

In April 2010, Atlantic bought over 800,000 wireless accounts from Verizon Wireless for $200 million. These subscribers were mostly in rural parts of Georgia, Illinois, Ohio, Idaho and the Carolinas.

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