Hawaiian Telcom cuts Q3 losses
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New product launches and cost-cutting measures helped Hawaiian Telcom Communications Inc. reduce its third-quarter loss even as revenue slipped, the company said yesterday.
The company said progress cleaning up service problems that have plagued operations since last year has allowed it to debut new products, such as its 7 megabit-per-second and 11-megabit-per-second high-speed Internet services.
Hawaiian Telcom also said it laid off three executives as part of cost-cutting measures that saw the company's workforce drop 11 percent in the quarter.
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Hawaiian Telcom Communications Inc. said yesterday it narrowed its third-quarter net loss as progress solving its service problems allowed it to launch more products.
The Honolulu-based company also said it laid off three executives as part of cost-cutting measures.
Hawaiian Telcom lost $29.5 million in the quarter ending Sept. 30, down from $43.9 million a year earlier.
Revenue fell 3.4 percent to $120.4 million from $124.7 million. Results continue to be impacted by effort to clean up system problems that have plagued the company since last year, and above-normal levels of credits and adjustments, CEO Michael Ruley said in a conference call yesterday.
"Unfortunately, we have not delivered the type of financial performance I am confident this business is capable of delivering," Ruley said. "We are targeting a number of organizational changes to further increase operational efficiencies."
Three executive positions will be eliminated or consolidated, spokesman Ron Mizutani said. The senior vice president of sales and marketing, the vice president of human resources and the vice president of directories will be laid off. The sales and marketing position will be filled by the vice president of video services, a position that will go unfilled. No timeline was given for the other two layoffs.
"The leadership of these organizations will be making more decisions in the next several weeks on how we can function more efficiently," Mizutani said. "This is all from the top down and not the bottom up."
Operating expenses from continuing operations decreased 7.8 percent to $80.2 million in the quarter from last year, helped by an 11 percent decrease in workforce, as well as continued benefits from real-estate consolidation and $2 million related to lower state taxes.
In the quarter, Hawaiian Telcom launched higher-speed Internet service of 7 megabits per second and 11 megabits per second for $39.99 and $49.99 a month, respectively. The company also debuted free wireless Internet for existing customers in 100 hot spots statewide and lowered the cost for its entry-level Internet service to $19.99 a month for the first year to draw in new customers.
Hawaiian Telcom has 92,800 high-speed Internet subscribers, down from 94,124 in the year-earlier quarter.
The company's myChoice bundle plan, which includes home phone service, unlimited long-distance and high-speed Internet, won 4,200 subscribers in the quarter, down from 5,900 subscribers gained in the prior quarter, for a total of 20,042 customers.
The number of land-line subscribers continued its steady decline. The company had 338,482 subscribers in the third quarter, compared to 580,900 in the second quarter. That's down from 595,000 in the first quarter of this year and 602,900 subscribers in the fourth quarter of 2006.
Ruley also said the state Public Utilities Commission late Tuesday approved the $435 million sale of the company's directory publishing business to Local Insight Media LP.
Hawaiian Telcom has posted a quarterly profit twice since its spinoff two years ago from Verizon Communications Inc. Washington, D.C.-based private equity firm Carlyle Group acquired Verizon's Hawaii assets in 2005 for $1.6 billion, changing the company name from Verizon Hawaii to Hawaiian Telcom.