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Strong 3Q results spark Security First shares

Security First Technologies Corp. (Nasdaq: SONE) rallied up 7 1/4, or 18 percent, to 46 15/16 Wednesday, one day after it posted a smaller-than-expected loss in its third quarter.

In the quarter, Security First lost $2.6 million, or 3 cents a share, on sales of $24.8 million.

First Call consensus expected the provider of Internet-based applications for the financial services industry to lose 5 cents a share in the quarter.

The $24.8 million in sales marks a 279 percent improvement versus the year-ago quarter when it lost $5.8 million, or 22 cents a share, on sales of $6.5 million.

In the quarter software licensing revenue grew to $2.3 million, up 111 percent from the same time last year. Professional services revenue jumped to $14.8 million, a 294 percent improvement from the third quarter of last year.

It also recorded a 42 percent sequential increase in the number of end users processed through the Securities First Technologies Data Center.

Gross profit margins improved to 44 percent, up from 31 percent in the year-ago quarter.

"Our third quarter performance continues to highlight the strengths of our technology and the successful execution of our business plan," said CEO James Mahan in a prepared release.

Security First shares moved up to a 52-week high of 79 1/4 in April after falling to a low of 8 1/16 last November. The stock split 2-for-1 in May.

First Call consensus expects it to lose 3 cents a share in its fourth quarter and 29 cents a share in the fiscal year.

All eight analysts covering the stock maintain either a "buy" or "strong buy" recommendation.