The company's stock closed up at 8-3/16, up from yesterday's close of 8.
Verity's third quarter is expected to post a net loss of $10.8 million, or $1 a share, for the quarter ending February 28, compared with net profits of $112,000, or 1 cent a share, for the quarter a year ago.
But excluding a one-time acquisition charge, Verity would have posted a loss of $800,000, or 7 cents per share. Wall Street, however, had expected a loss of 1 cent per share, according to First Call.
Verity spokesperson Don McCauley defended the company's performance, citing a 52 percent rise in revenues for the past three quarters over the same period a year ago. "It's a strong growth situation for us," he said.
The company expects revenues of $11.1 million for the quarter, compared with $8 million for the same quarter 1996. But revenues over the previous quarter slowed by 4 percent.
Software sales accounted for $9.1 million of Verity's revenues, up sharply from $6.4 million for the third quarter 1996 but down from the $9.7 million earned in the previous quarter.
McCauley said the second quarter was hard to beat considering a $3.9 million sale to Cisco Systems during that three-month period. The deal marked Verity's single largest transaction to date.
Verity expects to issue its third-quarter results on March 19.