NetSuite shares soar on strong 3Q results

NEW YORK -- Shares of NetSuite Inc., which provides business management software over the Internet, jumped Friday after the company announced better-than-expected third-quarter results.

THE SPARK: NetSuite posted a loss of $8 million, or 11 cents per share, compared with a loss of $6.9 million, or 10 cents per share, in the same quarter last year. Excluding one-time charges, the company posted an adjusted profit of 8 cents per share for the recent quarter.

Revenue rose 31 percent to $79.8 million.

Analysts, on average, expected a profit of 6 cents per share on $78 million in revenue, according to a FactSet poll.

THE BIG PICTURE: San Mateo, Calif.-based NetSuite sells cloud-based financial and enterprise-resource planning software. It focuses on mid-sized businesses, but has recently started picking up business from larger ones.

The company's stock has been on a roll this year. Since the start of January, the shares have gained about 40 percent.

THE ANALYSIS: "In our view, NetSuite is executing at an impressive level," Wunderlich Securities analyst Richard Baldry wrote in a note to investors, noting that the company showed strength across various geographic regions and customer sizes.

But Baldry backed his "Hold" rating for the company, though he raised his price target by $4 to $50, noting that its shares are already trading at levels that are more than double of those of the company's competitors.

THE SHARES: Up $8.09, or 14 percent, to $65 in heavy afternoon trading, after peaking earlier at $66.23, their highest level to date, according to records kept by FactSet.