Hawaiian Telcom reported lower third-quarter revenues as the phone company continued to lose land-line customers.

However, job cuts and other cost-cutting efforts helped the highly leveraged company narrow its income loses during the quarter.

Hawai'i's major phone company lost $29.5 million during the three months ended Sept. 30, compared with a $43.9 million loss in the year-ago quarter. The company attributed the improved results to lower operating costs and an income tax gain. During the quarter, revenues fell 3.4 percent to $120.4 million from the year-ago quarter.

The decline in revenues followed a drop in customer access lines, or land lines, operated by the the company. The number of access lines, which are a gauge of customer accounts, fell 6.9 percent to 572,997, with most of the erosion coming in the residential market.

Hawaiian Telcom said those losses were in line with industry trends, which are driven by a defection of land-line phone users to cable and wireless competitors. Those losses have been somewhat exacerbated by the company's ongoing "back office" support systems problems, which have limited Hawaiian Telcom's ability to launch new products. Still, Hawaiian Telcom was able to launch faster versions of its high-speed internet service during the quarter.

"I remain encouraged by the strides we continue to make developing the company," said Mike Ruley, Hawaiian Telcom's chief executive, during a call with investors and analysts. "These efforts have led to improvements in or operational efficiency and the further stabilization of our business, but unfortunately, we have not delivered the type of financial performance I am confident this business is capable of delivering."

In 2005, the phone company was sold for $1.6 billion by Verizon Communications Inc. to the Washington, D.C.-based global equity firm The Carlyle Group and a small group of local investors. The company has since struggled with billing and customer service problems.

During the conference call company officials said they could not predict when the business would no longer be hampered by recurring billing problems and other information systems issues. The privately owned company also did not announce further developments regarding plans to launch a new video service next year.

During the first nine months of 2007, Hawaiian Telcom posted a profit of $7.4 million, versus a loss of $114.8 million during the year-ago period. Year-to-date profits were helped by a one-time $52 million cash payment from former Hawaiian Telcom consultant BearingPoint Inc. Revenues during the first three quarters of 2007 fell 3 percent to $367.3 million.

At the end of the third quarter, Hawaiian Telcom had 1,632 employees, which was 202 fewer positions than on Sept. 30, 2006. A portion of those cuts came in response to early-retirement incentives offered by the company. Hawaiian Telcom also has cut costs by freezing its pension benefit plan for nonunion employees.

Ruley said further reorganization moves were being planned. Those include a small reduction in senior executive positions, he said.

"When we get those plans laid out, we can report on those," Ruley said.

Reach Sean Hao at shao@honoluluadvertiser.com.