Frontier Communications Corporation (FTR - Free Report) recently reached a new tentative deal with the Communications Workers of America (CWA) 142. This puts an end to the three-week long strike by almost 1,400 Frontier Communications employees in West Virginia and Ashburn. The newly formed agreement has been sent to the employees for their consent.
CWA Local 142 union covers 1,400 employees in West Virginia and Ashburn. The previous contract expired on Mar 3, 2018.
CWA members have been negotiating with Frontier Communications since last May. The contract was originally set to expire on Aug 5, 2017 but was extended till Nov 4, 2017 and then until Mar 3.
Sources say that lay-offs, concerns about further job cuts and reducing job security led the workers to strike. However, strikes are unproductive for employees as well as the company.
Frontier Communications seems satisfied on being able to engage in talks with union members. The company is encouraging its workers to get back to work to provide quality customer service and offer broadband connectivity throughout the state.
In fact, following the announcement of the tentative deal, shares of Frontier gained 1.6% to close the trading session on Mar 26 at $7.04.
In fact, Frontier Communications has performed well over the last three months. Shares of Frontier have gained 3.4%, against the industry's decline of 8.2%.
Ratification of the deal would boost the stock further. This is because materialization of the transaction would help in avoiding long labor strikes, thus removing a major overhang on the stock
Similar Labor Negotiations
On Mar 23, AT&T Inc. (T - Free Report) reached a deal with the Communications Workers of America (CWA) in relation to more than 10,000 AT&T Mobility employees in CWA District 3 – the Southeast Region.
In June 2017, CenturyLink Inc. (CTL - Free Report) and CWA agreed on an extension covering almost 25% of the company’s total workforce, spread across 13 states, including Oregon, Idaho, and Colorado. The company agreed to increase the annual pay from 2.5% to 3%, while maintaining the existing pension and savings plan and increasing employee contributions for health care in the deal.
Zacks Rank & A Key Pick
Currently, Frontier Communications is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock in the broader Utilities sector is Shenandoah Telecommunications Co (SHEN - Free Report) , carrying a Zacks Rank #2 (Buy). Sales and earnings for Shenandoah are estimated to rise 3.8% and 76.9%, respectively, for full-year 2018.
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