Shares of Alteva, the Philadelphia-based business Internet and phone provider, lost as much as $1.75, or one-sixth, of their value and were trading at a four-year low, after the business Internet and phone provider told investors it was stopping its dividend to shore up its financial position and "support future growth."
"We applaud the decision. It was the right thing to do in terms of long-term shareholder shareholder value creation," Jason Revland, Ambler-based analyst at Blueprint Capital Management (corrected), told chief executive David Cuthbert, regarding the dividend cut, during Alteva's earnings conference call. But traders still dumped the stock in their immediate reaction to the news.
Alteva says its number of hosted users rose 15% to more than 38,.000 vs. last year. Net income totalled $40,000 as sales from its Philly-based Unified Communications arm rose to $3.9 million, vs. $3.3 milllion a year ago.
By contrast, telephone revenues (Alteva owns Warwick Valley Telephone in upstate New York, and it's been cutting staff up there) declined, and accounted for less than half of the company's total $7.3 million in quarterly sales. The dividend cut -- the latest sign of Alteva's attempted transformation from a local wired phone utility into a national mid-market data-hookup info-tech stock -- will save $6 million a year, the company said in a statement.