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Earnings to speak for Netscape

Netscape navigates under the spotlight again for its third-quarter results after revamping its business strategy.

Netscape Communications navigates under the spotlight again today when the software company, which is revamping its business strategy, posts its third-quarter results.

Wall Street is expecting the company to post a loss of 2 cents a share, according to First Call. The 12 analyst estimates listed by First Call range from a loss of 7 cents per share to break-even results.

Analysts are closely watching this quarter's results as one of the first tangible signs as to whether Netscape's new business strategy is paying off.

The company's shares were up more than 4 percent in afternoon trading, as U.S. markets in general rallied on receding concern about the White House sex scandal (See related story).

Netscape eked out a $8,000 profit for the last fiscal quarter but posted a $54.2 million loss for the month of January. The results for four months, rather than three, stemmed from a change in the company's fiscal year. This time around, the comparison should be easier to examine.

"This will really be the first quarter where we'll get a sense of the business as it stands now," said Steve Sigmond, an analyst with investment bank Dain Rauscher Wessels. "We'll see how the enterprise software looks and how the portal is doing and what kind of synergy exists between the two--or whether it's all one holistic view of the business."

Netscape has seen no appreciable browser revenues for months. The company began giving its browser away free earlier this year and focused on other alternative business models. Sigmond said he anticipates a strong quarter for the company's business software unit.

"The drivers of their enterprise segment are their e-commerce products and their messaging infrastructure," he said.

Faced with stiff competition from Microsoft and others, Netscape has shifted its focus from the Internet browser to the enterprise software and Web "portal" markets. Last year, it bought Kiva Software, an application development server company. Much of Kiva's technology is now found in the Netscape Application Server.

On the Net, Netscape is expanding Netcenter into a destination site. With the rapid success of Net directories such as Yahoo and Excite, companies are scrambling to add services in order to be the gateway, as well as the mainstay, of choice.

The company's stock got a boost last week on news that it would strike an Internet partnership with Citibank and in naming former Oracle executive Barry Ariko to help bolster its software sales operations, among other reasons.

Like many Net stocks, Netscape is down from a peak in July.