FairPoint posts Q2 loss of $17.8M
CHARLOTTE, N.C. (AP) – FairPoint Communications Inc. said Wednesday it posted a second-quarter loss as the provider of local and long-distance phone and Internet services recorded lower sales and hefty debt restructuring costs.
For the quarter ended June 30, the Charlotte, N.C.-based company posted a loss of $17.8 million, or a loss of 20 cents per share, compared with $23.1 million, or 26 cents per share, a year ago.
When adjusted, earnings totaled $99.9 million in the most recent quarter amid lower revenue, higher operating expenses, higher bad debt expenses and costs for an exchange offer for nearly 83 percent of outstanding senior notes.
Revenue declined 4 percent to $299.6 million from $133.9 million, as access lines declined 3 percent.
The company owns and operates local exchange companies nationwide that offer Internet, television, and local and long-distance voice services, among others. FairPoint took over northern New England phone systems from Verizon last winter, and officials have appeared before Maine's and New Hampshire's public utilities commissions to discuss ongoing issues with FairPoint's delivery of landline telephone and broadband Internet service.
"The issues experienced with the systems cutover are continuing to improve, and most of them are behind us," said David Hauser, FairPoint’s chairman and CEO since June. "Going forward, we will be focusing on three primary areas: improving customer service, growing business and broadband revenue, and reducing costs."
The company warned that the reduction in its interest expenses following the debt swap offer may not be sufficient to keep FairPoint from breaching certain lender requirements for the quarter ending Sept. 30. FairPoint also said it may exceed its debt-to-equity ratio in the current quarter. The company is in talks with its bondholders regarding a more comprehensive and permanent restructuring of its debt obligations.
Total access line equivalents were 1.65 million at the end of Q2, compared with 1.82 million at the end of Q2 2008. During the second quarter, total access line equivalents declined by 3 percent, compared with a decline of 1.6 percent during the first quarter of 2009.
High-speed Internet subscribers totaled 296,107 as of June 30, a decrease of 1.6 percent compared with 300,882 at the end of Q1 and an increase of 0.6 percent compared with 294,412 at the end of the previous year’s quarter.
Long distance subscribers totaled 605,468 at June 30, down 2.9 percent from 623,497 as of March 31 and down 7.8 percent compared with a year ago.
Shares retreated 10 cents, or 14 percent, to 61 cents in late trading, after rising 12 cents, or 20.3 percent, to close the regular session at 71 cents.
– CED’s Traci Patterson contributed to this report