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Illuminet sees 3Q profit of $3 million

Illuminet Holdings (Nasdaq: ILUM) earned more than $3 million in the third quarter.

In third quarter results released after market close Wednesday, the provider of services for switched telephone networks reported net income of $3.5 million, or 14 cents per share on a pro forma basis not including the effects of Illuminet's IPO last month. Based on roughly 29.2 million shares outstanding after the IPO, Illuminet earned about 12 cents per share.

The company saw earnings of $1.3 million in the third quarter of 1998. Operating margin increased to 21.9 percent from 13.1 percent from the year ago period.

Third quarter revenue increased 43 percent year-over-year, to $26.8 million from $18.7 million.

Network connectivity services such as message switching and transport generated $13.4 million, a 37 percent improvement from the third quarter of 1998. Intelligent network services saw revenue of $11.6 million, an 83 percent gain from the year-ago period, including a one-time boost of $1 million related to use of a new system for collecting billing data.

Clearinghouse services revenue was $1.5 million, an 8 percent gain year-over-year. Network usage software revenue totaled $300,000, compared to $1.3 million in the 1998 third quarter.

Shares of Illuminet rose to 1 to 44 1/4 in Wednesday's trading prior to the earnings report. IPO underwriters began coverage of the stock on Tuesday, with BancBoston Robertson Stephens and Donaldson, Lufkin & Jenrette starting with "buy" ratings; Morgan Stanley Dean Witter initiated with an "outperform" on Illuminet stock.>