Sequoia Software posts smaller than expected loss

Sequoia Software (Nasdaq: SQSW) handily topped estimates Wednesday with a third quarter loss of $4.2 million, or 14 cents a share, on sales of $5.3 million.

Earnings tracking firm First Call Corp. was projecting a loss of 19 cents a share based on a poll of three analysts.

Sequoia, which provides extensible markup language (XML) software, went public in May priced at $8 a share. It closed off .31 to 5 on Wednesday.

For the third quarter, Sequoia's sales were up 81 percent from $2.9 million a year ago. In the third quarter a year ago, Sequoia reported a net loss of $3.8 million.

License revenue jumped 200 percent to $4.5 million in the quarter and gross margins came in at 88.2 percent, well ahead of the 24.3 percent reported a year ago. The company said high end sales of its e-business software boosted margins.

The company added 31 new customers in the quarter.>