CHARLOTTE, N.C. (AP) – Communications service provider FairPoint Communications Inc. posted a fourth-quarter loss Thursday as higher expenses weighed on results. The company also suspended its quarterly dividend to preserve cash and bolster its balance sheet.
The news sent shares tumbling in aftermarket trading, down 15 cents to $1.45, after earlier closing down 29 cents at $1.60.
For the three months ended Dec. 31, the company posted a loss of $76.1 million, or 85 cents per share, on sales of $319.3 million. FairPoint bought Verizon Communications Inc.'s land operations in Maine, New Hampshire and Vermont for $2.3 billion last spring, so the year-ago results are not directly comparable to the current period.
The latest quarter's results included interest expenses of $52.7 million and investment losses of $49.9 million. Revenue declined 3 percent sequentially, hurt by the weakening economy and declining access lines. Phone companies are facing growing line losses as consumers are switching from traditional land lines to wireless and Internet phone services.
For the full year, FairPoint posted a loss of $68.5 million, or 85 cents per share, on sales of $1.27 billion.
In 2008, FairPoint grew by fivefold with the acquisition of the Verizon businesses, said Gene Johnson, chairman and chief executive, adding that the company has "made great strides in integrating and stabilizing the northern New England operations."
FairPoint said it "will consider an appropriate dividend payout once the financial markets and the economy improve and our leverage has been reduced."
FairPoint's shares traded a year ago as high as $11.17, but took a big hit during the market meltdown last fall, and recently bottomed at $1.49.