Neutral Tandem (IQNT) Announces Special Dividend

Neutral Tandem, Inc. (IQNT), doing business as Inteliquent, provides interconnection and interoperability solutions worldwide.  It offers voice, IP transit, and Ethernet telecommunications services primarily on a wholesale basis.  The company announced its intention to declare and pay a special one-time cash dividend in an amount between $4.80 and $5.65 per share, or between approximately $155 – $180 million in aggregate, during the fall of 2012, subject to market and other conditions.  IQNT is currently trading at $12 per share making the special dividend yield of 40% or more.

The company earnings were well below estimates on slowing sales to telecom service provider customers.  However, Thomas White/Global Capital upgraded NEUTRAL TANDEM INC to FAVORABLE on August 13, 2012.  IQNT has an equity summary score of 6.3 out of 10 for a Neutral outlook.

Bottom line: This is a stock to watch going forward as the special dividend is huge (40%) but the company must get its earnings turned around before Fall.  The company had $165 million in current assets as of 6/30.