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GST Telecom sees narrower-than-expected 3Q loss

The third quarter of GST Telecommunications Inc. (Nasdaq: GSTX) won't be as red as analysts expected.

The Vancouver, Wash.-based communications provider said Monday it expects to report a fiscal third quarter loss ranging between 90 cents and $1 per share, not including one-time events. First Call's survey of 11 analysts predicted a loss of $1.02 per share.

GST expects to see third quarter revenues of $90 million to $95 million, including $39 million in $42 million from construction, $50 million to $52 million from services, and $1 million to $1.5 million from products. Earnings before interest, taxes, debt, amortization, Y2K expenses and litigation costs will range between $9 million and $11 million, GST said.

Construction delays pushed some business into future quarters, GST said. The company also saw lower revenue from stand-alone long distance business and off-net wholesale private line services. But executives remained optimistic.

"We see continued strong demand for our local, data, and broadband services and are very optimistic about our future business prospects," said Joe Basile, president and CEO. "We believe our strategy of focusing on value-added integrated services offered on our network is working and we anticipate continuing to make progress on divesting our non-core assets."

GST spund off its Guam and GST Home businesses in the second quarter, which improved EBITDA, the company said. GST saw a one-time gain of $30 million in the third quarter, stemming from a settlement with Global Light Telecommunications.

Shares of GST gained 1/16 to 10 5/16 in Monday's regular trading prior to the quarterly preannouncement. Of 14 Wall Street firms surveyed by Zack's Investment Research, nine recommend GST as a "strong buy", four have the equivalent of "moderate buy" advisories, and one maintains a "hold" rating on the stock.>