Nortel plunges on 3Q sales

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Williams Communications Group Inc. (NYSE: WCG) said Wednesday loss was 32 cents a share, much less than First Call''s expected loss of 49 cents a share. The company also said fourth quarter revenue will likely exceed current analyst consensus by about 10 percent.

Shares in the company, which provides voice, data, Internet, and video services to communications service providers, closed up 1.13 to 17.19 Tuesday.

Consolidated EBITDA was a loss of $16.9 million, compared with a loss of $33.6 million in the second quarter of 2000. Net loss was $150.5 million or 32 cents per share.

Unaudited third-quarter revenue was $533.8 million, including network services revenue of $178.2 million. Revenue was growth was strong, up $18.7 million over the second quarter of 2000 and up $35.5 million than the prior year''s number.

Offsetting increased revenues were lower one-time dark fiber sales due to timing and trends in that industry, the company said. Network services revenue, which excludes dark fiber sales and revenue from PowerTel, increased 32 percent compared with the second quarter of 2000 and 121 percent from the third quarter of 1999. The improvement was driven by booming usage of fiber-optic capacity on Williams'' long-distance network, as it approaches completion at the end of 2000, the company said.

The company said it is a full year ahead of schedule in its plan to provide network services in North America. It has generated an estimated $3 billion in new network business so far this year and more than doubled its network customer base to 177 data and voice customers.

Williams Communications said it continues to target 20 percent sequential growth in network revenue, which excludes one-time dark fiber sales and revenue from PowerTel for the fourth quarter.

This expected growth, combined with strong third quarter sales and full-year dark fiber revenue of about $70 million, should make full-year network revenue $700 million, or about 10 percent greater than current analyst consensus, the company said. Williams Communications added it remains confident it can meet 2001 analyst estimates for network revenue of $1.3 billion to $1.4 billion. This reflects a 100 percent year-over-year growth in recurring revenue, 100 percent growth in PowerTel revenue and approximately $100 million in dark fiber-related revenue.

According to these numbers, the company also sees the network being EBITDA-positive on an operational basis by the end of 2001.