Monday, November 15, 1999

HawTel’s net
down 16.9%
for quarter

A 4.2% increase in local
sales can't offset declining
revenues in other areas

By Russ Lynch


GTE Hawaiian Tel GTE Hawaiian Tel's third-quarter profit fell 16.9 percent, as a dip in total sales was accompanied by a rise in operating expenses.

The latest quarter showed a net income of $21.6 million on revenues of $161.6 million, down from a profit of $26 million on revenues of $165.7 million in 1998's third quarter.

A company spokesman today said no executive was available today to comment on the third-quarter results and the company's quarterly filing with the Securities & Exchange Commission does not elaborate.

But comments in the SEC filing about the year to date show a pattern.

Local business was strong, propped up by Hawaii customers' increasing willingness to pay extra for enhanced services such as SmartCall.

Demand from other telecommunications companies for access to the GTE's Hawaii network also continued to soar, but the demand didn't pay off as well because the company had to lower its prices in a competitive environment.

Third-quarter sales of local telephone service in Hawaii were up 4.2 percent, to $69.4 million in the latest quarter from $66.6 million in the 1998 period.

Art Network-access revenues, paid by the other telecom companies, showed a 2.5 percent dip to $42.4 million in the third quarter from $43.5 million a year ago. Hawaiian Tel's revenues from other services and sales totaled $49.8 million in the latest quarter, down 10.4 percent from $55.6 million a year earlier.

Total operating costs and expenses for the three months through Sept. 30 were $120.6 million, up 2.1 percent from expenses of $118.1 million in the year-earlier quarter.

For the first nine months of the year, the total profit of $73.3 million was up 6.5 percent from $68.8 million in the same period last year. Revenues for the nine months of $506.1 million were up only 0.4 percent from last year's $504.1 million.

Hawaiian Tel said local-service revenues were up $4.6 million, boosted by a $2.2 million rise in sales of enhanced custom calling features and a $1.3 million increase in revenue from operator- and directory-assistance calls.

Network access revenues were increased by $8 million by high-bandwidth demand alone, mostly by Internet users.

However, lower access prices charged to both Hawaii and interstate users cut nine-months revenues by $13.6 million.

Total operating costs for the latest nine months, $370.1 million, were down 1 percent from $374.3 million in the 1998 period.

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