Now that the dark days of bankruptcy are behind it, Hawaiian Telcom (Nasdaq: HCOM) appears to be making up for lost time, posting its second consecutive quarterly profit this week. The company, which emerged from bankruptcy late last year, reported a $6.7 million profit for the second quarter of 2011, a $1.2 million improvement on its first quarter profit of $5.5 million.
Revenue was up only slightly, about 1 percent from the second quarter of 2010, but that quarter featured a $22 million loss as the company focused its energies on a reorganization plan to get it out of bankruptcy. For the most recent quarter, landline telephony customers declined about 5.3 percent, but the rate of decline has been slowing. Broadband Internet subscriber additions totaled about 4,500.
Hawaiian Telcom recently has appeared to be in a growth mode under CEO Eric Yeaman, having launched new IP business services and other new efforts while it was still under Chapter 11 last year. This summer, it gained video franchise rights to competitively challenge monopoly incumbent Oceanic Time Warner in the pay TV market. However, the telco has yet to detail its TV service agenda.
If it can keep landline defections at a manageable rate and continue growing its base of broadband Internet and bundled service customers while launching new efforts like video, Hawaiian Telcom may be able to quickly put the bankruptcy specter behind it, a possibility that seemed implausible three years ago when the firm filed for bankruptcy protection.
The island telco has come a long way since private equity firm The Carlyle Group acquired it from Verizon (NYSE: VZ) in 2005 for about $1.6 billion. When back office problems struck, it turned out to be a harbinger of difficulties that telco FairPoint Communications (Nasdaq: FRP) would face in its own acquisition of Verizon properties.
- see this Honolulu Star Advertiser post
- and the earnings release
Earnings Summary: Wireline in the second quarter 2011
Hawaiian Telcom completed its reorganization last October
Hawaiian Telco filed for Chapter 11 protection in December 2008
Carlyle Group bought Hawaiian Telcom in 2005 before it faltered