Alaska Communications Results Hit by Write-downs and iPhone Churn

­Alaska Communications Systems (ACS) has reported that its 3rd-quarter profits was down to US$300,000 compared to US$1.8 million a year ago. The decline in net income was put down to a $4.9 million increase in depreciation expense resulting from an assessment that with changes in technology, asset salvage values previously set by regulators and historically viewed as reasonable, were no longer appropriate.

Revenues of $91.3 million were in line with $91.3 million in the prior year, while EBITDA of $34.9 million was up 2.8 percent from prior year EBITDA of $33.9 million.

Wireless revenues declined by $2 million or 5 percent due to declines in roaming revenue and subscribers.

"The ACS strategy of capturing growth in the enterprise and wireless segments to offset reductions in legacy wire line business continues to deliver the right kind of revenue and earnings mix," said Liane Pelletier, ACS president and chief executive officer. "For the quarter, we delivered stable revenue and EBITDA growth as a result of new enterprise customers buying business IP services."

"Our participation in the wireless market this year continues to challenge ACS - a function of the economy and the iPhone. In terms of the economy, reports just out summarize what ended up being the softest tourist season in years, affecting both Alaska businesses and visitors to the state.

"In the quarter, ACS generated more gross additions than the prior three quarters, and grew data ARPU 56 percent year over year, but the subscriber additions were insufficient to outpace churn to the iPhone. We look forward to introducing Android-powered handsets over the next few months and hope they will re-establish a level playing field in devices," concluded Pelletier.

Posted to the site on 6th November 2009