American Businessphones Reports Drop in Profits

Blaming the costs of opening several new offices, American Businessphones Inc. of Irvine said second-quarter profits plunged 32% to $179,800 from $262,000, despite a 65% jump in telephone system sales.

For the period ended Dec. 31, the company, which sells, installs and maintains telephone equipment for businesses, had sales of $6.6 million, compared to $4 million in the prior-year quarter.

For the first half of its 1986 fiscal year, the company had profits of $226,750, off 50% from the $458,200 posted the year before. Revenues for the period were $11.4 million, up 56% from $7.3 million.

Dana Karcher, chief financial officer, attributed the profit decline to the costs of opening three new retail shops and three new branch offices in the last six months. The company opened retail outlets, catering to small businesses and affluent households, in Santa Ana, Los Angeles and Anaheim. Branch offices to serve medium-sized businesses were opened in Phoenix, Dallas and San Bernardino.

Karcher said he expects earnings to pick up in the final six months of the year, with full-year profits probably matching the $950,000 recorded in 1985.