Iona Technologies yesterday reported a net loss of $26 million (€26.5 million) for the third quarter and said it would establish a new stock-option plan to replace its existing incentive programme.

The firm also said it would generate $29 million to $31 million revenues in the fourth quarter, and reduce its pro forma net loss to between 7 and 11 cents per share, compared to 31 cents per share in the third quarter.

In a conference call with analysts, Iona chief operating officer Mr Steve Fisch said the market had stabilised in Europe and the US but had weakened in Asia.

He said the firm had signed two deals worth more than $1 million in the fourth quarter with a telecoms and financial services firm. Iona would close the fourth quarter with cash reserves of $70 million to $75 million, he added.

Iona confirmed it had reduced staff by 20 per cent, or 172 employees, during the third quarter, resulting in a once-off restructuring charge of $12.9 million, significantly more than the $8 million originally anticipated.

The firm's results show a net loss of $26.2 million in the three months to September 30th, 2002, compared to $29.3 million in the same period last year. Iona's net loss per share fell to 80 cents in the third quarter, down from $1.07 cents last year.

Operating expenses fell following the restructuring plan to $45.9 million in the third quarter, down from $61 million last year.