Citizens posts profit; to consolidate billing

Citizens Communications today reported a third-quarter profit of $11.4 million on revenues of $595 million, reflecting the company’s cost-cutting efforts over the last nine months.

Additionally, the company said during its conference call that it would further streamline operating costs next year by consolidating its billing functions onto a single platform. Though executives didn’t provide details of the project, Chief Financial Officer Jerry Elliott said the company will convert billing to an existing platform and that it would cost $20 million to $25 million.

"We think the payback on this project will be about 18 to 24 months after we complete it," he said during Citizens’ quarterly conference call.

The company’s ILEC operations recorded third quarter revenue of $511.6 million, down $8.2 million or 1.6% from $519.8 million in the third quarter of 2002. Much of that decrease came from the sale of access lines in North Dakota and the corresponding reduction in long distance and access revenue. That was offset slightly by a net 13,400 new DSL customers in the quarter. Overall, the company reported more than 105,000 DSL subscribers as of Sept. 30.

On the cost side, the company reported capital expenditures for the ILEC of $67 million, which is slightly below previous guidance. However, some of the differential will be made up in the fourth quarter as the company completes projects begun during the summer months, Elliott said.