Fairpoint Communications posts 2nd-quarter loss on hefty debt swap charges, lower salesBy AP
Thursday, August 6, 2009
Fairpoint Communications posts 2Q loss of $17.8M
CHARLOTTE, N.C. — 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, 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 land line 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 chairman and CEO, in a statement. “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.
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.
Tags: Charlotte, Financing, North America, North Carolina, Products And Services, Restructuring And Recapitalization, United States