reported higher-than-expected revenue and a lower-than-expected loss for its third quarter Tuesday.
But only a small fraction of its revenue came from transactions actually conducted over the Internet.
In after-hours trading Tuesday, the stock was trading at $31 a share, according to
. During regular trading, it climbed $2.38, or 7.9%, to $32.63 a share.
The Horsham, Pa.-based company, which runs 57 online communities for industry professionals, said it had a cash loss of $76 million, or 20 cents per share, in the third quarter. That compared with the consensus estimate of a loss of 29 cents per share, according to
The company's revenue grew to $73.7 million, a 38% increase over the previous quarter. Analysts were expecting revenue of around $61 million. While that's significant revenue growth, it's below the 95% sequential revenue jump the company reported for its second quarter. It's also a significantly lower sequential percentage gain when compared to B2B companies like
, where the sequential gain was 67%.
While traditional industries stress year-over-year results, B2B companies are usually judged on a quarter-over-quarter basis.
VerticalNet said that
, the electronics component brokerage that it acquired last year, brought in $39.3 million in revenue during the third quarter, or 53% of total reported revenue. Yet only $2.4 million of the unit's revenue, or 3.2% of the company's total revenue, was the result of transactions that NECX conducted online. VerticalNet has sparked controversy over whether it is a true B2B company because so much of its business is conducted off-line.
VerticalNet noted that after it added a "shopping cart" feature to NECX.com on Sept. 25 that allows customers to collect items before going to a virtual check-out counter, 15% of NECX's net exchange revenue moved online.
At the same time, though, e-commerce revenue for the company rose to $17.5 million, a 75% increase from $10 million in the second quarter. E-commerce includes money generated by the "storefronts" and "e-commerce centers" that the firm sells to its customers, who in turn can advertise and sell their own products over VerticalNet Web sites.
Advertising and services revenue was flat at $17 million, compared with $16.9 million in the second quarter.
The company said its deferred revenue grew to $57.2 million in the third quarter, a 23% increase from the $46.4 million in deferred revenue the company showed at June 30.