PORTLAND, Maine — FairPoint Communications posted its second profitable quarter in a row, fueled by lower post-retirement benefit costs negotiated earlier this year after a 131-day strike against the telecommunications service provider’s operations in Maine, Vermont and New Hampshire.
The North Carolina-based company on Tuesday reported net income of $53.1 million, up from $40.3 million in the previous quarter. The company’s net income in the third quarter dwarfed that of one year ago, when it posted losses of $37.8 million.
The profits in the third quarter came from cost-cutting measures, as the company’s revenue dropped slightly to $221.6 million from $228.1 million over the year.
The company said that its lower operating costs came primarily from lower post-retirement benefit expenses, the absence of expenses related to its labor negotiations and from employment cuts.
The company has cut 11 percent of its employees from one year ago. It had 2,278 employees in the most recent quarter, compared with 3,088 a year ago.
It reduced its New England headcount earlier this year with a plan to lay off 79 of its 800 workers in Maine. It planned to lay off 260 employees companywide.
The company’s latest report indicates its residential voice lines and broadband subscribers continue to decline while its higher-capacity ethernet customers have increased sharply, up 21 percent from one year ago.
Those customers include regional banks, health care networks and wireless data carriers. In addition to providing landline telephone service through most of the state, FairPoint owns much of the state’s fiber-optic data cable network that serves as a backbone for other Internet service providers.
The company’s residential broadband Internet business, down 4.2 percent over the year, stands to get a boost in the coming years as it in August decided to accept $80 million from the federal government to expand Internet service to rural areas in Maine.
The company’s earnings have surprised analysts, who projected the company would post per-share losses in each of the last two quarters. Analysts estimated the company would lose about 60 cents per share in the third quarter of 2015.
Per share, the company had diluted earnings per share of $1.96 for that period. FairPoint stock (FRP: NASDAQ) was up 4.4 percent in morning trading, to $16.98 per share.