Blaming high expansion costs, American Businessphones Inc. said its net earnings fell sharply during the fiscal quarter and nine months ended March 31 despite increased sales.
The Irvine-based firm, which sells and services business telephones, said third-quarter net earnings fell 14% to $178,495 from $208,528 a year ago. Nine-month net earnings fell 39% to $405,249 from $666,763 in fiscal 1985.
Revenue during the quarter increased 48% to $6.1 million from $4.1 million. For the nine-month period, revenue rose 53% to $17.5 million from $11.4 million.
Despite the lower earnings, company officials said aggressive cost-cutting, coupled with recent price increases, have improved the American Businessphones’ gross profit margins. As a result, the company said, earnings should improve during upcoming quarters.