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StorageNetworks Soars On Earnings

StorageNetworks of Waltham, Mass., satisfied a market looking for any shred of good news Wednesday, reporting quarterly revenues that were up nearly 500 percent and the hiring of a president and COO.

First-quarter revenues were $27.1 million, up 28 percent from the fourth quarter and 489 percent from the $4.6 million in revenues generated in the first quarter of 2000.

While still posting a loss of 34 cents per share (EBITDA loss of $22.1 million), the data-storage firm beat the expectations of analysts polled by First Call. They had anticipated a loss of 37 cents per share.

STOR shares shop up 28 percent in midday trading, advancing 2.890 to trade at 12.990 on heavier-than-normal volume.

The company also said networking industry veteran Ken Fehrnstrom would take over day-to-day operations as president/COO. He will report to Peter Bell, chairman and CEO.

Fehrnstrom has 19 years in the networking industry, with executive experience at Cisco Systems, Ascend Communications and GTE.

"Ken's in-depth management expertise and proven track record of building and scaling large organizations will help drive our rapid growth in 2001 and beyond," Bell said.

Commenting on the earnings report, Bell said, "The first quarter of 2001 was the best quarter in our company's history. We posted strong revenues and record 12-month bookings."

He touted the company's recently launched STORmanage service, which helps companies minimize the complexity of their storage management and reducing IT costs.

Among the high points of the quarter, Ford Motor Co. licensed StorageNetworks' software and suite of services, as its list of customers increased to more than 210.