December 17, 2017
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FairPoint losses accelerated to $43.6 million during strike

By Darren Fishell, BDN Staff
Updated:

PORTLAND, Maine — The pace of FairPoint Communications’ quarterly losses accelerated during the 131-day strike by 1,700 employees in two unions, with $73.6 million in costs related to negotiations and hiring temporary replacement workers.

The losses were steeper than analysts’ forecasts for the company, but the company said Wednesday it expects a new contract to dramatically reduce its pension obligations and health care costs.

The company reported the contracts would lower its debts for accrued pension obligations by as much as $45 million and lower its health care obligations for retirees by as much as $640 million, based on calculations as of Dec. 31, 2014.

The contract agreement preserved a defined benefit pension plan for existing employees but closed it to any new employees and lowered contributions to those pensions going forward.

The company has struggled since its bankruptcy reorganization in 2011, posting losses each year since. In its earnings report Wednesday, the company reported a $136.3 million loss in net income for 2014, compared with $93.5 million losses for the year before.

The company said its strongest growth came for data-based services and broadband services, where the company got about 9.9 percent of its revenue in the fourth quarter of 2014, compared with 8.1 percent of revenue one year earlier.

The company lost $43.6 million in the fourth quarter of 2014, up from $37.8 million in net losses during the third quarter and a $6.1 million gain in the fourth quarter of last year.

Losses for the fourth quarter of 2014 were 50 cents lower per share, at $1.64, than analysts projected. The company said it is not providing guidance on its earnings for the year ahead “due to the uncertain impact” the strike that lasted until Feb. 25 could have on revenue for this year.

FairPoint’s stock ( NASDAQ: FRP) was down 47 cents in afternoon trading, to $16.75 per share.


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