The quarterly loss, the first since Network Engines went public, amounted to 65 cents a share excluding special charges. Including the special charges, the net loss amounted to $7.3 million, or $1.66 per share. First Call/Thomson Financial analysts hadn't predicted the company's financial performance.
For the earlier quarter, the company had a net loss of $3.6 million, or 97 cents a share, on revenue of $1.6 million. For the quarter ending June 30, 1999, the company had a net loss of $1.7 million, or 52 cents a share, on revenue of $900,000.
Network Engines sells thin servers and was the first Intel server maker to squeeze two processors into the 1.75-inch "1U" size. The company licensed its technology for use in IBM and VA Linux Systems servers, but Compaq has come up with its own design.
Sun Microsystems, which makes thin servers using its own UltraSparc chip, also is experiencing strong sales with its 1U design. The servers are in demand at Internet service providers and other firms that have a need to cram lots of servers into a small space.