Netscape's stock up 12%

Netscape's stock rises 12 percent after the company's third-quarter jump in profits and revenues.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
Netscape Communications' (NSCP) stock jumped 12 percent today, a day after the company announced an increase in third-quarter profits and revenues.

Netscape, which reported its results after the market's close yesterday, saw its shares climb to 49-7/8 during the day from its previous close of 44-1/2.

The company's earnings were bolstered by brisk sales of its SuiteSpot and FastTrack server software to big businesses, exceeding Wall Street's expectations in both profits and revenues.

Netscape posted net profits of $7.7 million for the quarter ending September 30, up from $200,000 for the same quarter a year ago. The company earned 9 cents a share, beating analysts' estimates of 8 cents a share, according to First Call.

Revenues, meanwhile, totaled $100 million for the quarter, up 329 percent over last year.

The company's quarterly results were boosted by a number of high-profile contracts with Fortune 500 companies. Chevron, Shell, and JCPenney, for example, all signed up to use Netscape's server and browser software for their fledgling corporate intranets.

"Evidently, Microsoft is not taking business away from Netscape," said Daniel Rimer, analyst with Hambrecht & Quist. "Netscape has done well in the intranet space."

Meanwhile, Tarun Chandra, analyst with Laidlaw Equities, said Netscape has done a good job at keeping its costs down while maintaining a cap on its product pricing. He added that Microsoft and other competitors were forcing Netscape to keep its prices in check.

Marc Andreessen, senior vice president for technology, attributed the growth in profits to both the increase in sales and an increased tendency to sell through both hardware manufacturers and value-added resellers. "The more they sell of our products as a percentage basis of our sales, the more the cost of our goods sold goes down," he said.

Andreessen added that the company has also sharpened its enterprise marketing message, which helped it make inroads with Fortune 500 companies.