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Upgrades, 1Q results spark Inktomi shares

Inktomi Corp. (Nasdaq: INKT) rose 10 3/8, or 10 percent, to a 52-week high of 110 3/8 Friday, one day after it posted a smaller-than-expected loss in its first quarter.

In the quarter, Inktomi lost $2.4 million, or 2 cents a share, on sales of $36.1 million.

First Call consensus expected Inktomi to lose 4 cents a share in the quarter.

On Friday, Banc of America Securites upgraded the stock from a "buy" to a "strong buy" recommendation.

Bear Stearns raised its fiscal 2000 estimate from a loss of 6 cents a share to break even and its fiscal 2001 earnings estimate from 16 cents a share to 23 cents a share.

The $36.1 million in sales marks a 233 percent improvement from the year-ago period when it lost $8.5 million, or 9 cents a share, on sales of $10.8 million.

Including a $4 million charge related to the acquisition of WebSpective Software, Inktomi posted a loss of $6.4 million in the quarter.

"We have started fiscal year 2000 with a tremendous quarter in which we experienced strong revenues, expanded into multiple markets, entered into new alliances and secured major customer wins across all our product lines worldwide," said CEO David Peterschmidt in a prepared release.

In the quarter, Inktomi's portal service business, which includes search, directory and shopping engines, accounted for $14 million of its total revenue, a 166 percent jump from the year-ago quarter and a 30 percent improvement from the fourth quarter.

Its network products unit made up $22.1 million in sales, a 297 percent gain from the year-ago quarter and a 36 percent sequential increase over the prior quarter.

Inktomi's search engine processed more than 3.4 billion queries in the quarter, up 89 percent from the year-ago quarter and up 17 percent from the prior quarter.

Merrill Lynch Internet analyst Henry Blodget was expecting total sales of $31.9 million and a loss of 4 cents a share in the quarter.

"Inktomi has had an impressive quarter in terms of new contract announcements - all signs point to continued strong top-line momentum, Blodget said in a research report.

Last quarter, Inktomi lost $4.9 million, or 9 cents a share, on sales of $26.2 million.

Inktomi shares hit a previous 52-week high of 109 1/4 earlier this month after falling to a low of 26 in February.

Fourteen of the 16 analysts following the stock rate it either a "buy" or "strong buy."

First Call consensus expects Inktomi to post a loss of 6 cents a share in the fiscal year.