Consolidated Communications Holdings, Inc. Reports Decline in Revenue for Q3 2023
Segments of revenue
In the third quarter of 2023, Consolidated Communications Holdings, Inc. (CNSL) reported net revenues of $283.7 million, a decrease from $296.6 million in the same period last year. This decline in revenue can be attributed to various factors, including the sale of their Kansas City operations, which accounted for $11.4 million or 3.8% of total operating revenues in the previous year's quarter.
Despite the decline in revenue, CNSL demonstrated resilience in managing their operating expenses. The company effectively controlled their cost of services and products, reducing it from $141.2 million in Q3 2022 to $132.4 million in Q3 2023. Additionally, CNSL successfully managed their selling, general, and administrative expenses, which increased to $96.8 million from $72.8 million in the same period last year. This disciplined cost management contributed to mitigating the impact of the revenue decline on the company's overall financial performance.
CNSL faced challenges in the form of impairment losses and losses on the disposal of assets. During the nine months ended September 30, 2023, the company recognized a loss on impairment of assets held for sale amounting to $77.8 million, compared to $131.7 million in the same period last year. Additionally, CNSL reported a loss on the disposal of assets of $6.7 million in Q3 2023, which was a significant swing from the gain of $19.2 million in the previous year's quarter. These challenges impacted the company's profitability and overall financial results.
One noteworthy event during the quarter was the sale of CNSL's Kansas City operations, which closed on November 30, 2022, for gross cash proceeds of $82.1 million. This transaction resulted in a reduction of the carrying value of the net assets to be sold and recognition of an impairment loss of $5.2 million and $131.7 million during the three and nine months ended September 30, 2022, respectively. The subsequent loss on the sale of $16.8 million during the quarter ended December 31, 2022, further affected the company's financial performance.
Consolidated Communications Holdings, Inc. faced a decline in revenue in the third quarter of 2023, primarily due to the sale of their Kansas City operations. However, the company demonstrated strength in managing their operating expenses, effectively controlling costs. Despite challenges related to impairment losses and losses on the disposal of assets, CNSL remained resilient in their financial performance. The sale of the Kansas City operations and subsequent adjustments impacted the company's overall results.