Hector Communications Corporation Reports Revenues and Earnings for the Third Quarter of 2004

Hector Communications Corporation Reports Revenues and Earnings
for the Third Quarter of 2004
Hector Communications Corporation Declares First Cash Dividend 


HECTOR, Minn., Nov. 2  /PRNewswire-FirstCall/ -- Hector Communications
Corporation (AMEX:HCT) today reported operating results for its third quarter
and nine month periods ended September 30, 2004.  The Company's operating
results for the corresponding 2003 periods have been restated to reflect the
effects of the split-up of Alliance Telecommunications Corporation.  The
Company also announced that it will pay a cash dividend to shareholders for the
first time in its history.

Operating Results

Revenues from continuing operations were $7,806,000 for the three months ended
September 30, 2004, a decrease of 4% from $8,107,000 in 2003. The revenue
decrease was due to lower network access revenues from long distance providers
and reduced universal support payments from NECA. Access revenues from wireless
communications providers were also lower due to the impact of new
interconnection agreements that have been negotiated between the Company and
selected wireless carriers.  Operating income from continuing operations
decreased 9% to $1,923,000 in 2004 from $2,120,000 in 2003. Income from the
Company's investment in Midwest Wireless Holdings, LLC was $843,000 in the 2004
period compared to $596,000 in 2003.  Income from continuing operations was
$1,294,000 or $.32 per diluted share in 2004 compared to $1,008,000 or $.27 per
diluted share in 2003.  Income from discontinued operations was $210,000 or
$.05 per diluted share in 2003.

Revenues from continuing operations were $23,743,000 for the nine months ended
September 30, 2004, a decrease of 2% from $24,194,000 in 2003. The revenue
decrease was due to lower network access revenues from long distance providers
and lower video service revenues due to sales of cable television systems in
2003. Operating income from continuing operations decreased 7% to $5,356,000 in
2004 from $5,772,000 in 2003. Income from the Company's investment in Midwest
Wireless Holdings, LLC was $2,151,000 in the 2004 period compared to $1,903,000
in 2003. The Company's 2003 results benefited from gains on sales of cable
television systems totaling $1,081,000 ($.17 per diluted share net of income
taxes).  Income from continuing operations was $3,442,000 or $.87 per diluted
share in 2004 compared to $3,030,000 or $.81 per diluted share in 2003.  Income
from discontinued operations was $882,000 or $.23 per diluted share in 2003.

Curtis A. Sampson, chairman and chief executive officer, said, "The Company's
operating results continue to reflect the gains the wireless industry is making
in competition with wireline carriers.  Hector has a significant investment in
the wireless industry itself through its 8% ownership interest in Midwest
Wireless.  The decrease in the Company's operating income in 2004 has been
offset by the sharp increase in Midwest Wireless earnings and lower borrowing
costs, a trend that is expected to continue."

Curtis also said, "The dividend we are paying in December is the first in the
history of the Company.  It is a reflection of the Company's strong financial
position and bright earnings outlook."

Dividend

The Company's Board of Directors has declared a cash dividend of $.05 per
share.  The dividend will be paid on December 15, 2004 to shareholders of
record on November 30, 2004.

Hector Communications Corporation is a telecommunications holding company which
through its subsidiaries provides telecommunications services in rural
communities in Minnesota, Wisconsin and North Dakota.  The Company serves
29,700 telephone access lines, 8,200 cable television subscribers and 10,800
internet customers and has minority ownership interests in many other
telecommunications companies.

From time to time in reports filed with the Securities and Exchange Commission,
in press releases, and in other communications to shareholders and the
investing public, the Company may make statements regarding the Company's
future financial performance.  Such forward-looking statements are subject to
risks and uncertainties, including but not limited to, the effects of the
Telecommunications Act, new technological developments which may reduce
barriers for competitors entering the Company's local exchange or cable
television markets, higher than expected expenses and other risks involving the
telecommunications industry generally.  All such forward-looking statements
should be considered in light of such risks and uncertainties.

             Hector Communications Corporation and Subsidiaries
                               Earnings Summary

                                            Three Months Ended September 30
                                                 2004              2003
  Revenues from continuing operations         $7,805,590        $8,106,588
  Operating income from continuing
   operations                                  1,923,268         2,120,314
  Other income (expense):
    Income (loss) from investments:
      Midwest Wireless Holdings, LLC             842,842           596,331
      Other unconsolidated affiliates             52,003           (30,556)
    Interest and dividend income                  75,043            51,455
    Interest expense                            (728,323)         (961,574)
    Gain on sale of Hastad Engineering            12,805
      Net other income (expense)                 254,370          (344,344)

  Income from continuing operations
   before income taxes                         2,177,638         1,775,970
  Income tax expense                            (884,000)         (768,000)
  Income from continuing operations            1,293,638         1,007,970
  Income from discontinued operations                              209,505
  Net Income                                  $1,293,638        $1,217,475

  Basic net income per common share:
    Continuing operations                           $.35              $.29
    Discontinued operations                                            .06
                                                    $.35              $.35

  Diluted net income per share:
    Continuing operations                           $.32              $.27
    Discontinued operations                                            .05
                                                    $.32              $.32


            Hector Communications Corporation and Subsidiaries
                             Earnings Summary

                                             Nine Months Ended September 30
                                                 2004              2003
  Revenues from continuing operations        $23,743,249       $24,193,995
  Operating income from continuing
   operations                                  5,356,219         5,772,394
  Other income (expense):
    Income (loss) from investments:
      Midwest Wireless Holdings, LLC           2,151,089         1,903,090
      Other unconsolidated affiliates            231,444           (75,904)
    Interest and dividend income                 191,575           186,921
    Interest expense                          (2,216,200)       (2,730,426)
    Gain on sale of cable television systems      28,590         1,080,723
    Gain on sale of Hastad Engineering            12,805
      Net other income (expense)                 399,303           364,404

  Income from continuing operations
   before income taxes                         5,755,522         6,136,798
  Income tax expense                          (2,314,000)       (2,447,000)
  Minority interest in earnings of
   continuing operations of Alliance
   Telecommunications Corp.                                       (659,624)
  Income from continuing operations            3,441,522         3,030,174
  Income from discontinued operations                              881,854
  Net Income                                  $3,441,522        $3,912,028

  Basic net income per common share:
    Continuing operations                           $.95              $.87
    Discontinued operations                                            .25
                                                    $.95             $1.12

  Diluted net income per share:
    Continuing operations                           $.87              $.81
    Discontinued operations                                            .23
                                                    $.87             $1.04


            Hector Communications Corporation and Subsidiaries
                         Condensed Balance Sheet

                                             September 30      December 31
                                                 2004              2003
  Cash                                       $20,215,528       $16,581,315
  Other current assets                         8,242,717         8,609,295
  Property, plant and equipment, net          40,275,697        43,088,106
  Excess of cost over net assets acquired     30,921,094        31,691,927
  Investment in Midwest Wireless
   Holdings, LLC                              14,932,409        13,349,155
  Investments in other unconsolidated
   affiliates                                  2,860,208         2,796,035
  Other investments                            6,913,255         6,533,858
  Other assets                                   373,943           409,664
  Total Assets                              $124,734,851      $123,059,355

  Notes payable and current portion of
   long-term debt                             $6,512,000        $6,537,800
  Other current liabilities                    4,458,872         5,338,386
  Long-term debt, less current portion        54,738,786        57,529,378
  Deferred taxes and credits                   5,419,958         4,911,869
  Deferred compensation                          713,164           698,254
  Stockholders' equity                        52,892,071        48,043,668
  Total Liabilities and Stockholders'
   Equity                                   $124,734,851      $123,059,355


DATASOURCE: Hector Communications Corporation



CONTACT:  Curtis A. Sampson, Chairman and Chief Executive Officer, Steven

H. Sjogren, President, or Paul N. Hanson, Vice President and Treasurer, all of

Hector Communications Corporation, [phone]

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