Growth in Hawaiian Telcom’s new video service and high-speed Internet business were not enough to offset the continued loss of land-line customers and a drop in revenue from some of its business services in the first quarter.
Revenue for the January-through-March quarter totaled $96 million, down from $97.6 million in the first quarter of 2012, the company said Monday.
Hawaiian Telcom’s net income rose to $1.8 million, or 17 cents a share, in the first quarter compared with $207,000, or 2 cents a share, in the year-ago quarter that included a loss from a one-time early retirement of debt.
The number of Hawaiian Telcom’s traditional land-line accounts fell to 400,364 at the end of the first quarter, down 2.1 percent from the same time a year earlier. The growth in cellphone use over the past decade has cut into traditional land-line business across the country. Hawaiian Telcom’s predecessor, Verizon Hawaii, had more than 700,000 land-line accounts before it sold the company to the Carlyle Group in 2005.
Hawaiian Telcom’s video and high-speed Internet business, by contrast, has been growing steadily.
The company said 7,800 customers subscribed to its Hawaiian Telcom TV service in the first quarter, bringing its total subscriber base to 11,700. Revenue from video subscriptions grew to $2.2 million in the first quarter from $500,000 in the same period a year ago.
Hawaiian Telcom added 3,946 residential high-speed Internet customers during the quarter, bringing the total to 89,464.
"Our execution in the first quarter demonstrates a solid start to the year, highlighted by significant expansion of our enhanced broadband network and strong growth in Hawaiian Telcom TV and HSI subscribers," Eric Yeaman, Hawaiian Telcom president and CEO, said in a statement.
Business revenue fell to $40.5 million in the first quarter, a 3.8 percent decline from the year-earlier period. The drop was primarily the result of a $3.1 million decrease in revenue from equipment and managed services. The year-earlier numbers included a $2.7 million sale of equipment to a large Hawaii public school, according to Hawaiian Telcom.
Helping blunt the decline in business revenue was growth in Hawaiian Telcom’s Internet protocol services, including revenue resulting from the acquisition of Wavecom Solutions, a Honolulu-based information technology company. The deal closed at the end of 2012.
Hawaiian Telcom shares closed down 85 cents, or 3.4 percent, at $24.30 on Nasdaq Global Select Market. The results were released before the market opened.
