Competition hits
Hawaiian Tel profit
It attributes a 12.5% fall in net income
By Rick Daysog
to other interisland carriers
Star-BulletinGTE Hawaiian Tel's second quarter net income declined 12.5 percent, reflecting increased competition in the interisland telephone market. The company said it earned $23.7 million in the three months ending June 30, down from $27.1 million in the year-earlier period.
The results came on sales and revenues of $176.3 million, a 1.1 percent decline from second quarter 1996's $178.3 million.
For the first half of 1997, the company earned $35.4 million, up 8.6 percent from $32.6 million in the same period last year. First-half 1997 revenues were $326.3 million, compared with $319.4 million for the first six months of 1996.
The results were disclosed in a filing yesterday with the Securities & Exchange Commission. GTE Hawaiian Tel is a subsidiary of Stamford, Conn.-based GTE Corp. but the local telephone company files its own financial statements.
The company said the lower quarterly results were due largely to a 43.2 percent revenue decline from its interisland telephone market. The company said revenues from that sector dropped to $13.4 million in the second quarter from $23.5 million in the same period last year.
With the recent entry of competitors like Sprint Corp., MCI Communications Corp. and AT&T Corp., Hawaiian Tel said it has lost market share.
The company also noted that revenues from its local service rose 13.4 percent to $64.8 million from the year-earlier's $57.2 million.
Most of that was due to a 10.5 percent rate increase approved by the state Public Utilities Commission. The new rates went into effect in February.
"That was our first general rate increase that we had in 11 years," said company spokesman Calvin Tadaki.
The company said that operating expenses increased 2.3 percent to $129.9 million from the year-earlier's $127 million. Depreciation and amortization costs for equipment and other assets increased to $32.2 million in the second quarter from the year-earlier's $30.9 million.
