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PSINet posts narrower than expected loss

PSINet Inc. (Nasdaq: PSIX) posted a second quarter results that topped consensus estimates by 11 cents.

The Internet data communications carrier on Tuesday reported a net loss of $62 million, or $1 a share, beating the loss of $1.11 a share predicted by First Call. Sales gains and tight cost controls helped balance continued investments, the company said.

Shares in the Internet data communications carrier rose 13/16 to 55 11/16 Tuesday morning.

The second quarter loss compares to a deficit of $54.4 million, or $1.06 a share, for the same period a year ago. Revenues rose to $123.8 million, an increase of 131 percent over the $53.7 million reported for the second quarter of 1998 and an increase of 18 percent over the $104.8 million reported for the first quarter of 1999.

PSINet rang up a profit of $200,000 on total earnings before interest, taxes, depreciation and amortization. PSINet is the first independent business-focused ISP to achieve profitable EBITDA, the company said.

PSINet picked up the acquisition pace this quarter, buying 10 ISPs in five of the 20 largest telecommunications markets for $74 million, putting it in 16 of the 20 largest global telecommunications markets, the company said. It also launched PSINet E-Mail, allied with National Data Corp. (NYSE: NDC) for e-commerce developments, and established a market position in Latin America and Europe.

Since the beginning of April, PSINet has raised about $2.1 billion which it plans use for expansion into the top twenty telecommunications markets and into international regions where PSINet owns fiber, said William L. Schrader, chairman and chief executive officer. The company plans to expand global web hosting facilities over the next 18 months by investing in fiber and gaining more than 12 new centers. The company also increased in business accounts by 90 percent.

PSINet also beat estimates on losses in the previous quarter. Seven out of 12 analysts covering the stock rate it a "strong buy" according to Zacks Investment Research.