Hawaiian Telcom enjoys second-quarter surge

Hawaiian Telcom said its second-quarter profit tripled due in part to increasing customer demand for higher bandwidth and video services.

The technology company said net income for the second quarter was $1.4 million, or 13 cents a share, up from $455,000, or 4 cents a share, in the second quarter of 2015. Hawaiian Telcom’s revenue grew 3.5 percent to $99.5 million from $96.2 million a year ago.

“I am pleased with Hawaiian Telcom’s solid performance in the quarter,” said Scott Barber, Hawaiian Telcom’s president and CEO. “Demand for high-bandwidth IP-based data services remains strong, resulting in consistent strategic revenue growth over the past three years.”

Since 2010 the company has been investing in building and expanding its fiber network statewide as it has been transforming from its legacy business as a landline telephone company. Hawaiian Telcom offers services including internet, video, voice, wireless, security and cloud services supported by its fiber network.

Business revenue increased 9.7 percent year-over-year to $46.7 million, driven by a 40.2 percent growth in broadband services revenue and 15.3 percent growth in data center services revenue.

Revenue increases from the company’s new businesses more than offset the year-over-year decline in its landline business or voice services. Revenue from voice services was down nearly 6.4 percent, or $1.5 million, to $21.7 million from $23.2 million.

Business strategic revenue, from Hawaiian Telcom’s data center and cloud services, increased 35.4 percent to $19.8 million due to increasing demand from business customers for higher bandwidth and integrated communications systems. This revenue stream represents 42 percent of total reported business revenue, compared with 34 percent in the same period a year ago and 31 percent in the same period two years ago.

Hawaiian Telcom’s consumer revenue was $36 million, compared with $36.5 million in the second quarter of 2015.

Consumer strategic revenue represents 48 percent of total consumer revenue, up from 45 percent in the same period a year ago and 37 percent in the same period two years ago.

Hawaiian Telcom’s consumer strategic revenue, TV and residential internet services increased 5.2 percent year-over-year to $17.3 million. The increase was driven by video revenue.

Video services revenue grew to $10 million for the quarter, up 20.7 percent from $8.3 million a year ago, driven by new subscribers.

Hawaiian Telcom said it enabled 3,000 households for internet and TV service during the quarter, increasing the number of households that can receive its service to 198,000. The company increased subscribers to Hawaiian Telcom TV to 38,600.

Internet services revenue declined during the second quarter. Revenue declined $900,000 from the same period a year ago mainly due to promotional pricing. The company ended the second quarter with approximately 91,800 internet subscribers, and customer adoption of higher-speed offerings continued to increase.