USinternetworking Inc. said yesterday that its second-quarter net loss nearly doubled, while revenue surged 292 percent.
The Annapolis-based company, which leases packaged business management software over the Internet to such clients as US West and Hershey Foods Corp., said for the quarter that ended June 30 it booked a $42.0 million net loss, or 43 cents a share, on revenue of $26.2 million.
Analysts polled by Zacks Investment Research, a ratings service, had expected a loss of 44 cents per share in the quarter.
For the like three months of 1999, USi reported a $23.6 million net loss, or 29 cents a share, on revenue of $6.7 million.
USi shares dropped 37.5 cents to $18.50 yesterday. The second-quarter results were released after the stock markets closed.
Chairman Christopher R. McCleary noted that the company produced record revenue, added 42 new service contracts worth $88.7 million and logged "a fourfold improvement of our gross margins" during the quarter.
"This has been a quarter of exceptional performance for USi," McCleary said.
Andrew Stern, USi's new chief executive officer, told analysts and investors in a conference call that he thought the company's performance was "fantastic."
"The quarter was a watershed for USi," said Stern. He cited the big jump in revenue compared with the second quarter last year, as well as growth over the first quarter.
He said the company also was seeing growing interest in its business from mainstream corporations and organizations.
USi's business model is "penetrating into the mainstream economy," Stern said. "The model is taking hold and is very real."
McCleary, who stepped down as chief executive Monday to head a business strategy committee, said the quarter was marked by the signings of several high profile clients, record revenue and improving gross margins. New clients included Sony Electronics Inc., Yankee Candle Co. and the American Cancer Society, the company said.
For the first six months of this year, USi reported a net loss of $81.6 million, or 86 cents a share, on revenue of $44.0 million, compared with a $41.3 million net loss, or $1.63 a share, on revenue of $11.1 million in the corresponding period last year.