USinternetworking Inc. reported improved revenue in its third-quarter results and expressed optimism despite lower-than-expected growth.
"Despite the fact that the top line this quarter did not meet our expectations, fundamentally Q3 was a very strong quarter," CEO Andy Stern says. "This was the second-strongest quarter in our history." Stern attributes shortfalls in part to the condition of the dot-com market and the timing and level of sales.
The application service provider reported revenue of $28.3 million for the quarter, which ended Sept. 30, an increase of 189% over the same quarter last year. The company reported a loss of $47.8 million, or 49 cents a share, compared with a loss of $41.9 million, or 43 cents a share, in the previous quarter. The company also says it has secured more than $76 million in new service contract value, raising contract value sold this year to $240 million.
Analysts were upbeat after Tuesday's report. "I think that there's a lot of good news in this release, and a lot of things to commend the company about as they navigate their way through what is clearly a difficult environment," says Franco Turrinelli, an analyst with William Blair & Co. "This is a complex company in a complex industry that's really being faced with some very challenging changes to their environment, and they're suffering from being the leader."