Research Engineers Inc.:

The Yorba Linda developer of engineering software reported a profit of $16,000 or less than half a cent a share for its fiscal 1998 first quarter, compared with a year-earlier profit of $140,000 or 3 cents a share. Sales for the three months ended June 30 rose 35% to $2.8 million from $2.06 million.

The company said its net income was reduced by a one-time charge of $47,000 for severance expenses for a senior manager laid off at a recently acquired subsidiary. The drop in earnings per share also was affected by a 37% increase in shares outstanding during the quarter, company officials said.

Rapidly increasing overseas sales accounted for much of the revenue boost and accounted for 59% of total sales during the quarter, company officials said.

Research Engineers shares fell nearly 10% in light Nasdaq market trading Tuesday, losing 38 cents to close at $3.50..