Taking on costs for its acquisition of Verizon's northern New England business, FairPoint Communications reported a fourth-quarter 2008 loss of $76 million and about 85 cents a share on revenues of $319 million. The company may have further challenges in the first quarter of 2009, as it has suspended its quarterly dividend to conserve cash.
Suspending the quarter dividend will free up $93 million annually, allowing FairPoint to "focus on strengthening its capital structure." The company notes that the transition to its new billing platform has resulted in the delay of billing cycles that could negatively impact liquidity in the first half of 2009, so it's going to need some free cash to tide it over until the billing systems are in full swing. In addition FairPoint also fumbled the transition of email from Verizon servers to FairPoint servers, resulting in frustrated and angry customers, embarrassing PR and more expenses to clean up the mess.
Revenue for the fourth quarter was $319.3 million, down 2.7 percent when compared to $328.3 million in the third quarter; adjusted EBITDA was also down in the fourth quarter. The decline was attributed to a decrease in landlines, down 2.7 percent in Q4, as well as the weakening economy and the "effects of seasonality" in its northern New England properties. For the year, FairPoint has had a nearly 10 percent decline in landlines.
- FairPoint announces results. Release.
FairPoint cuts handful of jobs, takes bond rating hit - FierceTelecom
FairPoint continues to plod through email snafu - FierceTelecom