Pensions drag Hawaiian Telcom earnings

Hawaiian Telcom had a net loss of $1.9 million in the first quarter, down from a $154,000 profit in the same period of 2016, largely due to pension expenses.

The technology and telecommunications company, which is scheduled to officially release its earnings today, said its net loss was 17 cents a share in the first quarter, compared with a profit of 1 cent a share in the same period a year ago.

Hawaiian Telcom said the loss was mostly due to $3.7 million in noncash pension expenses related to employee retirements in the quarter.

The company’s three major revenue streams — business, consumer and wholesale — were down compared with 2016. Hawaiian Telcom’s revenue fell $4.3 million, to $94.5 million from $98.8 million in the same period the previous year.

Revenue from the company’s business serv­ice fell to $43.9 mil­lion, compared with $44.8 million. The drop was due in part to lower revenue versus one-time gains from two large institutional customers in the same quarter last year. Hawaiian Telcom said it received one-time revenues from two large institutional customers in the first quarter of 2016.

Consumer revenue was down $1.9 million to $34.3 million, compared with $36.2 million in the first quarter of 2016. The company said the decline was largely due to lower revenue from its legacy landline business and low-bandwidth copper internet services.

Revenue for Hawaiian Telcom’s consumer internet services was down 13.5 percent, to $6.7 million. The company’s consumer landline revenue was down 10.9 percent to $16.9 million.

Revenue from the company’s cable video services grew 12.4 percent year over year to $10.6 million for the quarter. Video subscribers grew 15.3 percent in the first quarter for a total of 42,800 subscribers.

Internet services revenue for the first quarter decreased $1.0 million from the same period in 2016 due to promotional pricing and a decline in low-bandwidth copper internet subscribers.

Hawaiian Telcom’s wholesale revenue for the quarter totaled $12.8 million, down $0.9 million from the same period the year before. The decline was due in part to wholesale customers disconnecting low-bandwidth Ethernet services and reductions in rates for wireless carriers.

The company has also been investing in its next-generation fiber-optic network. Hawaiian Telcom spent $27.2 million in the first quarter on capital expenditures, which was $0.9 million less than what it paid during the same period in 2016. Approximately 90 percent of first-quarter capital expenditures was used to pay for Hawaiian Telcom’s growth and expansion initiatives, such as building out its fiber network.

“Our investments in fiber have continued to transform our company and position us well for future growth in revenue and cash flow,” said Scott Barber, Hawaiian Telcom’s president and CEO, in a statement. “We believe we have a strong combination of fiber assets, product portfolio, employees and strategies to capitalize on key opportunities in this marketplace.”