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Storage Networks loss smaller than expected

Storage Networks reports a net loss of $1.20 per share for its first quarter since its initial public offering, handily beating analyst expectations.

Storage Networks reported a net loss of $1.20 per share today for its first quarter since its initial public offering, handily beating analyst expectations.

Analysts surveyed by First Call/Thomson Financial expected a loss of $1.35 per share for the company, which rents out access to high-end data storage services. The start-up had revenue of $8 million and a net loss of $26 million for its second quarter, which ended June 30.

For the previous quarter, the company had a net loss of $23.9 million, or $1.09 per share.

The company currently has 89 customers, a 71 percent increase over last quarter. New customers include Credit Suisse First Boston, FleetBoston Financial, Juniper Networks, MyPoints, YesMail and Xdrive. The company also expanded its existing relationships with Merrill Lynch, Lycos and BestBuy.

StorageNetworks raised $243 million in its IPO in June. On opening day, the stock price tripled to $90.25 and has risen steadily since then. Today, the stock dropped $9.12 to a midday price of $130.50.

Data storage is an increasingly hot market, as Internet-driven companies seek to manage and secure huge databases. Companies such as EMC, IBM, Sun Microsystems, Compaq, Hewlett-Packard and Hitachi Data Systems are locked in a battle to provide the expensive storage systems themselves, while companies such as StorageNetworks offer to run those systems for customers.