PSINet squeaks past estimates

PSINet (Nasdaq: PSIX), provider of Internet access for large corporations, said Tuesday its second-quarter loss was $1.32 a share, a penny less than the loss expected by First Call Corp. Revenue was also up 125 percent over last year's, and it expects to meet expectations for the rest of 2000.

Shares in the company, which named a new CFO recently, closed at 18 5/16 Monday.

Net loss for the quarter was $215.6 million, or $1.32 per basic and diluted share, compared with the $204.2 million, or $1.35 a share reported in the first quarter 2000.

Revenue was $278.3 million, a 125 percent increase over second quarter 1999 and up 25 percent over the first quarter of 2000.

EBITDA for the quarter was a negative $11.7 million, an improvement of 25 percent over the negative $15.5 million for the first quarter 2000.

The net loss included $35.2 million for accelerated amortization, $1.0 million in costs for the planned disposition of the company's consumer business and gains of $4.0 million from the sale of investments.

Overall results for the quarter include $30.3 million in revenue, $122,000 in positive EBITDA and $6.5 million in net loss from its acquisition of Metamor Worldwide, now PSINet Consulting Solutions.

The company called the quarter a turning point, as it transitions from an Internet access provider, to complex managed web hosting. PSINet said it had over $1.5 billion of cash and cash equivalents as of June 30, and sees strong demand for its web hosting products, particularly in the U.S.

Not including results from PSINet Consulting Solutions, the company expects to meet revenue targets for the second half of 2000 of between $610 million and $620 million. It sees positive EBITDA for the half year in the 4.5 percent to 5.0 percent of revenue range, with EBITDA neutral to slightly positive. Cost controls are expected to improve gross margins, which should be 33 percent to 36 percent for the year.