MFN sails through Q4

(Telephony) Metromedia Fiber Network (MFN) posted a substantial increase in revenue for the fourth quarter and a net loss that was better than analysts’ expectations.

MFN recorded revenue of $61.0 million, an increase of 136% from the comparable period in 1999 and a 19% increase from the third quarter. The company also reaffirmed a revenue target of $475 million for 2001 and an EBITDA loss (earnings before interest, taxes, depreciation and amortization) between $155 million and $145 million.

The builder of optical IP Internet infrastructure expects to be EBITDA positive by 2003.

“It was very impressive to see them come in line with expectations and reiterate guidance [for 2001],” said Cary Robinson, senior research analyst at U.S. Bancorp Piper Jaffray. “They are definitely differentiated.”

MFN is unique in that it has a significant position in dark-fiber infrastructure in the metropolitan area network, Robinson said.

“The dark-fiber revenues aren’t going to go away--that’s a recurring revenue stream with strong customers,” Robinson said.

For the fourth quarter, MFN recorded a net loss of $134.8 million, or 24¢ per share--4 cents more than analysts’ consensus estimates as compiled by First Call/Thomson Financial but an increase compared to 1999’s fourth quarter loss of $70.6 million, or 15¢ per share.

MFN executives said the loss was caused by a $30 million increase in amortization expenses associated with the acquisition of AboveNet Communications, an increase in interest expense related to debt issues, and an increase in overhead and headcount to support the company’s network expansion.

As of the end of the fourth quarter, MFN had deployed 1.43 million fiber miles, an addition of 19% over the third quarter total of 1.2 million fiber miles. The company’s stated goal is to lay a fiber-optic network of 3.6 million fiber miles by 2004. MFN is operational in 14 cities operation and is constructing networks in 30 others. The company plans to be in 51 cities in North America and 16 cities in Europe by 2004.

MFN said it would provide additional quarterly guidance on March 12.