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Rhythms NetConnections exceeds 3Q estimates

Rhythms NetConnections Inc. (Nasdaq: RTHM) topped analysts' estimates in its third quarter Wednesday, but still lost $61.7 million, or 89 cents a share, on sales of $3.3 million.

First Call consensus expected it to lose 97 cents a share in the quarter.

Its shares closed up 4 7/16, or 11 percent, to 44 7/16 ahead of the earnings report.

In the quarter, Rhythms operated 6,700 DSL lines, up 106 percent from the 3,250 lines in the second quarter.

Its high-speed data transmission service was available in 27 metropolitan areas, up 59 percent from the 17 markets it served in the second quarter.

"We exceeded our third quarter objectives for revenue, lines in service and central office deployment and have achieved our 1999 national coverage goals well ahead of schedule," said CEO Catherine Hapka in a prepared release.

Company officials said it will expand to another 20 markets in fiscal 2000, giving it a total of 70 markets,

Its shares hit an all-time high of 111 1/2 shortly after its initial public offering
in April. Its shares fell to a low of 26 1/16 earlier this month.

Six of the seven analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.

First Call consensus expects it to lose $3.09 a share in the fiscal year.