Citizens Utilities' first-quarter 1997 earnings affected by communications sector expansion and marketing activities.

STAMFORD, Conn.--(BUSINESS WIRE)--April 30, 1997--Citizens Utilities' vice president and treasurer, Robert J. DeSantis, announced today that earnings and earnings per share for the first quarter ended March 31, 1997 were impacted by expansion and marketing activities at its Citizens Communications sector.

Revenues for the 1997 first quarter were $372.5 million compared with $329.1 million for the same period last year. Earnings for the 1997 first quarter were $30.2 million compared with $38.9 million in last year's first quarter. Earnings per share were 13 cents compared with 16 cents in the 1996 first quarter.

Citizens Communications and Citizens Public Services sectors both achieved double-digit increases in revenues. Mr. DeSantis emphasized that, "Citizens Communications' revenues grew 20%, with revenues from long distance service and Electric Lightwave increasing 219% and 81%, respectively, in the first quarter. The success we are experiencing in Citizens Communications' revenue growth, while still below our expectations, is consistent with our previously announced plan to deploy a national distribution network and to establish a strong brand identity.

"Increasing communications revenue and revenue opportunities require additional expenses and capital expenditures in 1997 and 1998 to deploy and support Citizens' national distribution network and branding initiative. It is fairly simple," Mr. DeSantis stated, "the market is asking for our services and we are acting now so that we do not miss these revenue opportunities."

While Citizens' earnings in its core local exchange and public services businesses continued to grow at a healthy rate, first-quarter 1997 earnings reflect the impact of increased network, sales, marketing and operational systems support expenses relating to the expansion of Citizens Communications. Mr. DeSantis added, "Earnings will most likely continue to reflect increased and accelerated expenses and capital expenditures during 1997 and 1998 to ensure that Citizens emerges as a formidable and integrated communications company and is fully prepared for increasing competition. Citizens' Board of Directors and management team believe that the expected long-term benefits of this strategy considerably outweigh any short-term impact on 1997 and 1998 earnings and earnings per share, which will likely be below 1996 levels."

Citizens (NYSE: CZNA, CZNB) provides telecommunications and public services to approximately 1.6 million customers in 22 states. Citizens Communications, one of the nation's fastest-growing communications companies, operates an integrated national distribution network over which it provides local, long distance, paging, cellular, network sales and other communications products and services. Citizens also has investments in Centennial Cellular Corp. (NASDAQ: CYCL) and Hungarian Telephone and Cable Corp. (ASE: HTC) and owns Electric Lightwave, Inc., a leading competitive provider of telecommunications services for business and long distance carriers in the western United States.

Table follows and additional information about Citizens Utilities is available on the Internet at http://www.czn.net. -0-

               Citizens Utilities Company and Subsidiaries
                   Consolidated Financial Data
                            (unaudited)

                                  For the quarter ended
                                       March 31,
                                                             %
(Dollars in thousands)                  1997      1996    Change
Income Statement Data
Revenues                            $  372,492 $  329,138    13%

Natural gas, electric energy and
 fuel oil purchased                     80,759     68,361    18%

Sales and marketing expenses            14,134      5,336   165%

Network expenses                        35,329      8,626   310%

Depreciation                            56,566     47,030    20%

Other operating expenses               123,623    128,793    -4%

     Total operating expenses          310,411    258,146    20%


Operating income                        62,081     70,992   -13%

Investment and other income             12,284     11,047    11%

Interest expense                        27,016     22,003    23%

Income taxes                            15,627     19,927   -22%

Convertible preferred dividends          1,552      1,253    24%

Net income                           $  30,170   $ 38,856   -22%

Earnings per share  (a)              $    0.13   $   0.16   -19%

(a) Adjusted for subsequent stock dividends.

CONTACT: Arthur Dague

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