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USi revenues grow, as do losses

Application service provider USinternetworking posts better-than-expected third-quarter results, buoyed by increased revenues.

Application service provider USinternetworking today posted better-than-expected third-quarter results, buoyed by increased revenues.

For the third quarter, Annapolis, Maryland-based USi posted a net loss of $27.8 million, or 69 cents per share, compared to a net loss of $23.6 million, or 66 cents per share, for the second-quarter ended June 30, 1999. Analysts polled by First Call expected the company to post a wider loss of 74 cents a share.

USi, which competes against rivals Corio, AppNet, and others in the emerging application hosting market, said revenues for the third quarter were $9.8 million, up 46 percent over last quarter's revenues of $6.7 million.

Shares of USi rose 3.25 percent today, closing up 0.94 at 29.75.

For the quarter, the company also said it received $57 million in new service contracts, compared to the second-quarter total of $38.6 million. USi said it ended its third-quarter with 81 client contracts, an increase from 44 deals at the end of the last quarter.

USi hosts applications from business software makers, such as PeopleSoft, Lawson, and Siebel, for small- to midsized businesses that want to use the software but can't afford to install or manage it. The applications hosting market is expected to grow to $2 billion by 2003, according to market research firm International Data Corporation.

In separate news today, USi announced the appointment of Chuck Teubner as executive vice president and chief financial officer, and Gary Rogers as the company's senior vice president for worldwide sales. Teubner was most recently chief operating officer at software start-up and services firm Concept Five Technologies. Rogers joins USi from CMS/Data, another software and services firm, where he served as chief operating officer and vice president of sales and marketing.