HawTel rings up
44% net gain
The company says much of
By Russ Lynch
the increase came from an
earlier cost-cutting move
Star-Bulletin
GTE Hawaiian Tel had a 44 percent increase in its second-quarter profit, reporting a net of $39.9 million for the three months through June 30, up from $27.6 million in the year-earlier quarter.
Revenues of $188 million in the latest quarter were up 5.6 percent from $178.1 million in 1998 quarter, according to its report to the Securities & Exchange Commission.
While much of the second-quarter profit increase was due to a one-time cost savings from a pension-plan adjustment, the company's normal operations also increased their profit, the company said.
Jill Hayami, GTE Hawaiian Tel's manager of business analysis, said the company's ongoing operations gained because of continuing cost containment.
As part of that effort, the company offered an incentive package to employees who would leave the company.
While that caused a one-time charge of $7.2 million in the first quarter of this year, the departures also changed the company's pension obligations.
As employees left during the second quarter and took up a pension option from what Hayami said was a well-funded pension fund, the company was able to save $19 million in payments it otherwise would have made to the fund.
Hayami said that cut operating expenses by $19 million, for a savings of $11.8 million in the company's net results.
In the latest quarter, GTE Hawaiian Tel had revenues of $70.4 million from local telecommunications services, up 2.6 percent from $68.6 million in the year-earlier quarter.
This year, local-service revenues have been up because of increased demand for enhanced services such as SmartCall, as well as from a small growth in the number of lines being operated.
Network access services, in which other telecommunications companies pay for access to the GTE Hawaiian Tel system, produced revenues of $46.9 million in the latest quarter, up 12.7 percent from $41.6 million in the year-earlier period.
Total operating costs were down 7.6 percent at $118 million, from $127.7 million in the 1998 quarter.
For the first half of 1999, the company had a profit of $51.6 million, up 20.6 percent from a profit of $42.8 million in the first half of last year. Half-year revenues were $344.5 million, up 1.8 percent from $338.4 million.
GTE Hawaiian Tel does not report per-share earnings since all its shares are owned by GTE Corp.
