Aether Systems Inc., an Owings Mills wireless software developer that has struggled through the technology downturn, said yesterday that its losses narrowed and revenue increased during the third quarter.

The company reported a net loss of $226.2 million, or $5.37 a share, for the quarter, which ended Sept. 30. That compares with a net loss of $243.4 million, or $5.98 a share, in the corresponding quarter of last year.

Aether's third-quarter operating loss was $19 million, or 45 cents a share, before noncash and other charges. The operating loss before charges was $44.9 million, or $1.10 a share, in the third quarter of last year.

Revenue was $31.7 million, up from $24.9 million in the third quarter of last year.

The results met analysts' expectations, according to a survey of five analysts by Zacks Investment Research.

"Overall, it looks like pretty decent results," said Richard Piotrowski, vice president and senior analyst at SWS Securities Inc. in Dallas.

The numbers were released after the close of the markets. Shares of Aether rose 25 cents, or 9.43 percent, to close at $2.90.

"We are pleased with our continued progress in reducing operating expenses while maintaining a stable revenue base during this prolonged period of macroeconomic and sector weakness," said David S. Oros, Aether's chairman and chief executive.

The company said it expects revenue of at least $30 million in each of the next two quarters and operating losses reaching a little more than $20 million by the first quarter of next year.

"Like other companies, they're doing the right things to try and get profitable," Piotrowski said. "The question is, when will the economy pick up to allow them to improve the rate at which they do show profitability? And I don't see it in the near term right now."