The Waltham, Mass., company reported a net loss of 34 cents per share, compared with Wall Street analyst expectations of 37 cents per share, according to First Call. The company had a net loss of $33 million on revenue of $27.1 million--28 percent more than the $21 million revenue of the previous quarter and 489 percent more than the $4.6 million of the year-ago quarter.
New COO Ken Fehrnstrom was the former chief executive of Ensim, which sells software to companies that host Web sites. Previously he worked at networking and telecommunications companies Cisco Systems and Lucent Technologies.
Analysts were delighted with the company's performance, pointing to new customers in large companies that aren't victims of the dot-com collapse.
StorageNetworks "posted a very impressive" first quarter of its fiscal year 2001, which ended March 31, said Lehman Brothers analyst Harry Blount. He lauded the company's expense controls as well as its shift from one-time professional services to revenue that will recur quarter after quarter.
Goldman Sachs analyst Matthew Janiga was more moderate in his remarks, but predicted a narrower loss for the fiscal year overall and said the company has enough cash to break even financially in 2003.
The company said the average customer pays $500,000 per quarter, an increase over the $450,000 last quarter.
Among the company's new customers in the quarter were Microsoft, Sun Microsystems, lumber company Weyerhauser, Washington Mutual Bank, Adidas and Bank One. Repeat customers include Covisint, MetLife and Lycos.
The storage industry lasted longer than the PC and server industries before getting hit by the spending slowdown that's afflicted technology companies. But even storage stalwarts such as EMC and Network Appliance have been forced to lower revenue estimates.
StorageNetworks is the best established of a host of storage service providers and the only publicly traded company of the bunch.
However, its stock has come down considerably since its soaring initial public offering in June. Shares sold for $27 during the IPO and closed at $90.25 on the first day of trading, but have sunk to less than half of the IPO price in less than a year.
On Wednesday, StorageNetworks' stock closed up $1.95, or 19 percent, at $12.05. Many technology stocks were buoyed by a surprise interest rate cut.