PSINet reports 4Q loss, CFO resigns

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PSINet (Nasdaq: PSIX) said Tuesday its fourth quarter operating loss was 99 cents a share, slightly narrower than First Call's expected loss of $1.01 a share. Along with strong revenue growth, the company also announced its chief financial officer is resigning.

Shares in the Internet super carrier closed at 45 13/16 Friday. The company, which offers products and services for web hosting, e-commerce, and high-speed Internet access saw its stock rise in January after it got a license from Hong Kong's Telecommunications Authority to build wireless facilities and a submarine cable.

Fourth quarter revenue of $185.4 million was increase of 97 percent over the $93.9 million reported for the fourth quarter of 1998 and an increase of 32 percent over the $140.6 million reported for the third quarter of 1999. EBITDA for the quarter was a negative $16.9 million, due to accelerated investments to meet higher than expected demand and expansion expenses, the company said.

Net loss for the quarter was $134.8 million or 99 cents a share, before the effect of an $88.7 million charge (64 cents a share) for acquired in-process research and development related to three companies acquired in 1999.

The basic and diluted loss for the fourth quarter including the charge for acquired in-process research and development is $1.63 a share.

As the company expanded into the top 20 telecommunication markets worldwide, it increased revenue by 114 percent, with 85 percent coming from organic growth and 29 percent from the 43 acquisitions PSINet made in 1999.

The company's web business grew 50 percent sequentially for the quarter, due to additional capacity created by the new data centers opened in London, Tokyo, Herndon, and New York.

The company also said it sees strong demand in its wholesale business. Earthlink (Nasdaq; ELNK), the second largest ISP in the U.S., is PSINet's largest wholesale customer. The company said it has also grabbed market share in supplying access to the "free" ISP services market with new customers like NetZero (Nasdaq: NZRO) and AltaVista Free Access. ="">