Thursday July 15 2:10 AM ET,,,Inktomi's Quarterly Loss Smaller Than Forecasts
SAN MATEO, Calif. (Reuters) - Inktomi Corp (Nasdaq:INKT - news), which makes Internet search software, Wednesday reported a fiscal third-quarter loss that was smaller than most forecasts, as the company's sales more than tripled.
The company said it suffered a loss of $5.2 million, or 10 cents per share, in the three months ended June 30, excluding charges related to its acquisition of the Impulse Buy Network. Including those charges, the company had a net loss of $6.3 million, or 13 cents.
The consensus among analysts had been for a third-quarter loss before charges of 12 cents a share, according to First Call Corp., a research firm that tracks such estimates. In the year-ago period, the San Mateo, Calif.-based company lost $6.3 million, or 15 cents.
Inktomi recently acquired the Impulse Buy Network in a move to apply its popular search technology to online shopping and build a service that would help people find the best buys.
During the latest quarter, it also launched a new Directory Engine, which combines pure search technology with enhancements to help prioritize and sort results.
The company said its third-quarter sales more than tripled to $19.6 million from $6.3 million last year.
__========_________==========_________===========__
Inktomi sales up threefold
Loss is less than expected; caching sales soar
By Bambi Francisco, CBS MarketWatch
Last Update: 8:52 PM ET Jul 14, 1999 Internet Daily
Net headlines
SAN MATEO, Calif. (CBS.MW) -- Inktomi tacked on another solid quarterly performance Wednesday as the Internet infrastructure software company surpassed analysts' expectations by reporting narrower-than-expected losses thanks to a threefold surge in sales.
"Wow," said David Hilal, an Internet analyst at Friedman, Billings, Ramsey & Co., who expects to raise his estimates and price target. "It was an extremely strong quarter along its core businesses."
"It provides further evidence that the company continues to execute in all of its key businesses, which include portal services and network products," said Robert Fagin, an Internet analyst at Bear Stearns.
After the market closed, the San Mateo, Calif., company reported a loss of $6.3 million. Excluding one-time acquisition charges, operating losses came in at $5.2 million, or 10 cents a share, narrower than both the 13-cent loss reported in the year-ago period and the 12-cent loss expected on Wall Street.
Quarterly sales shot up to $19.6 million, beating sales projections by 14 percent and up from $6.3 million a year ago and $14.6 million in the previous quarter. Sales from Inktomi's network products division, which includes its fast-growing caching software, grew 286 percent. Portal service sales grew 141 percent.
"What's driving the demand for caching" is that "data networks are interested in having content stored in their networks because that becomes a launching pad for new services, like streaming audio and video," said David Peterschmidt, in an interview with CBS MarketWatch. "So, we expect demand to stay in place."
Peterschmidt also said that sales from caching would account for 55 to 65 percent over the next year.
After the news, shares of Inktomi (INKT: news, msgs) were barely changed in after-hours trading on Instinet. The stock rose 3 5/16 to 128 7/8 in regular trading.
Key metrics
Inktomi also said search queries grew by 13 percent sequentially to over 2.4 billion, slightly below analysts' most optimistic projections. Peterschmidt would not project sequential growth in the future quarters. However, he said on an annualized basis, search queries grew 52 percent organically.
Contribution from America Online (AOL: news, msgs) will not impact queries in the near-term, Peterschmidt said, explaining that Inktomi's search service for the portal will "go live" at the end of the quarter.
As for Inktomi's shopping technology, Petershmidt said the number of products being offered has grown to 4 million, up from 2 million in April
Solid growth it seems but Peterschmidt said the shopping business is viewed "as an evolution" with three to four quarters needed for the technology to "become a mainstream product.
"We don't know how fast the rate of adoption will be (for shopping)," he said. "Christmas will be the litmus test for us."
But while the market to facilitate shopping online is projected to grow to $30 billion in 2002 vs. $4 billion for caching, Petershmidt couldn't judge if sales from shopping would eventually surpass that of caching until after the holiday season.
He did add, however, that the company would make acquisitions or investments to "accelerate time-to-market" for the company's products, including the shopping technology. He also said that a number of companies with shopping applications are "interested in our database and we think there may be synergies there."
Asked about competition from Novell (NOVL: news, msgs) and Network Appliance (NTAP: news, msgs) and Cisco Systems (CSCO: news, msgs), Peterschmidt said Inktomi is the only company that offers an "open-software architecture approach" which is what clients want.
The solid results came the same day Inktomi announced that it has deepened an alliance with British Telecom. BT will deploy Inktomi's Traffic Server network caching technology to deliver next-generation Internet services in Europe.
Separately, Alan Braverman, an Internet analyst at Banc of America Securities, initiated coverage on Inktomi with a "buy" rating and a $170 price target. See Inktomi preview story.
|
