Quarterly, 9-Month Net Drops for American Businessphones

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.