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Inktomi posts surprise profit in second quarter

    Inktomi surprised Wall Street Tuesday by posting the first profitable quarter in company history. The Internet software developer earned $1 million, or a penny a share, on sales of $47.3 million.

    First Call consensus expected it to lose 2 cents a share in its second fiscal quarter.

    Ahead of the earnings report, Inktomi (Nasdaq: INKT) shares rallied up 24, or 26 percent, to 116.

    The $47.3 million in sales marks a 211 percent jump from the year-ago quarter when it lost $7.4 million, or 7 cents a share, on sales of $15.2 million.

    In the quarter, Inktomi's network products business recorded sales of $30.8 million, up 250 percent from the year-ago quarter.

    Its portal service business chipped in with $16.5 million in sales, up 157 percent from the same period last year.

    "Today, we have passed a historic milestone for Inktomi and our shareholders in achieving our first profitable quarter," said CEO David Peterschmidt in a prepared release. "Our company fundamentals are strong as evidenced by our impressive top-line revenue performance and consistent diligence in expense management across the board."

    In the quarter, Inktomi's search engine processed more than 4.2 billion queries, an improvement of 91 percent from the year-ago quarter and up 24 percent from the first quarter.

    The company ended the quarter with $269.3 million in cash, cash equivalents and short-term investments.

    Last quarter, Inktomi topped analysts' estimates, posting a loss of $2.4 million, or 2 cents a share, on sales of $36.1 million.

    Its shares moved up to a 52-week high of 241 1/2 in March after falling to a low of 42 in June.

    Seventeen of the 18 analysts covering the stock maintain either a "buy" or "strong buy" recommendation.

    First Call consensus expects Inktomi to post a loss of 2 cents a share in the fiscal year, though those estimates will likely be adjusted following Tuesday's upside surprise.