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PSINet Reports Greater Loss

PSINet Inc. Tuesday reported smaller than expected operating losses of $66.7 million, or $1.02 per diluted share, vs. losses of $14.2 million, or $0.36 per diluted share. First Call's estimates pegged losses at $1.07 per share.

The net loss to shareholders for the quarter, including the charge for acquired in-process research and development, was $83.6 million, or $1.61 basic and diluted loss per share, compared with $48.1 million, or $0.93 basic and diluted loss per share, for the third quarter of 1998.

Fourth quarter 1998 earnings include a preliminary $30.4 million charge or $0.50 per share for acquired in-process research and development pertaining to the company's acquisition of Tokyo Internet.

Fourth quarter revenues were $93.9 million, a 39 percent gain above the $67.6 million reported for the third quarter of 1998 and 170 percent over the $34.8 million reported for the fourth quarter of 1997.

"This fourth quarter exemplifies the overall powerful performance of PSINet for 1998 on all fronts," said William L. Schrader, chairman and chief executive officer. "Our revenue growth for the quarter and the year was outstanding, and benefited from strong organic growth as well as significant additions to revenue through our successful acquisition program.

"Over the past year, as PSINet has expanded into 12 of the top 20 telecommunication markets worldwide, we increased our revenue by 113%, approximately half from organic growth and half from the 17 acquisitions made in 1998. We also increased our customer base to over 54,700 business customers as well as over 863,000 small office/home office (SOHO) and consumer customers, and acquired 125,000 equivalent route miles of OC-12 fiber-optic capacity worldwide," said Pete Wills, president and chief operating officer.