| SCO's revenue continues down the drain |
Mar. 08, 2006
The SCO Group Inc., the Unix and wireless software company best known for its seemingly endless Linux and IBM litigation, reported greater then ever losses for its fiscal first quarter, which ended January 31, 2006.
Revenue for the first quarter of fiscal year 2006 was $7.34 million, as compared to $8.86 million for the comparable quarter of the prior year. In SCO's prior quarter, ending Oct. 31, 2005, the Lindon, Utah company's total revenue was just over $8.5 million.
SCO CFO Bert Young blamed the decrease in revenue on the continued competitive pressures on its Unix products and services from Linux during a press conference.
Young also said that SCO was not satisfied with its Unix revenue. The company will try to better its Unix cash flow by increasing its marketing efforts.
The net loss for the first quarter of fiscal year 2006 was almost $4.6 million or 23 cents per diluted common share, as compared to a net loss of $2.96 million, or 17 cents per diluted common share, for the comparable quarter of the prior year. Included in the net loss for the first quarter of fiscal year 2006 was $401,000 of stock-based compensation expense. Included in the net loss for 2005's first quarter was $15,000 of stock-based compensation expense.
"Despite our decrease in revenue and our increase in net loss incurred during the first quarter, the Unix business continued to generate positive cash flow," said Darl McBride, SCO's president and CEO in a statement.
In particular, SCO claimed that its resellers and customers continue to implement its Unix operating systems: OpenServer and UnixWare. The relatively new SCO OpenServer 6 is doing well in both replacing its installed base and in winning some contracts, according to SCO, over competitive operating systems, such as Windows Server 2003.
OpenServer has also now been certified by MySQL AB. This will enable business customers to use the popular open source database on SCO OpenServer 6. The completion of this certification is an important step in permitting MySQL database customers to select SCO OpenServer as a platform on which to run their MySQL database applications.
The company's SCOSource division, which is meant to realize revenue from licensing Unix code, continues to do badly. It grossed only $30 thousand dollars while costing just over $4 million dollars. Young said that as SCO's legal intellectual property claims are upheld, the company expects this revenue to increase, while the costs will decrease since SCO has now paid off its legal debts.
To date, however, SCO has not seen any meaningful success in its Unix and Linux related IP (intellectual property) claims. Most outside experts hold out little hope that SCO will see victory in its case with IBM and Novell.
In a statement, McBride also said, "We are pleased with the recently announced general availability of our EdgeClick digital services and believe that with the $10 million in gross proceeds raised in our private placement in November, we can pursue our business operations and see our lawsuit with IBM through to its conclusion."
McBride said that it was premature to give meaningful guidance for SCO's EdgeClick business. That said, "digital services on handheld devices is a big market and it opens up a new chapter for the company. We're bullish on it on an excitement level, but it's too early to talk about numbers until we see how it plays out."
At the end of the quarter, SCO had cash and cash equivalents and available-for-sale marketable securities of over $19 million. In addition, $1.75 million of the cash is still being held in an escrow account. This last amount is being held for SCO's ongoing legal expenses
-- Steven J. Vaughan-Nichols
Do you have comments on this story?
Talkback here
NOTE: Please post your comments regarding our articles using the above link. Be sure to use this article's title as the "Subject" in your posts. Before you create a new thread, please check to see if a discussion thread is already running on the article you plan to comment on. Thanks!
(Click here for further information)
|
|
|
7 Advantages of D2D Backup
For decades, tape has been the backup medium of choice. But, now, disk-to-disk (D2D) backup is gaining in favor. Learn why you should make the move in this whitepaper.
4 Legal Reasons to Control Internet Access
The Internet is obviously a valuable resource for many organizations. However, many are exposed to legal liability concerns because they fail to control Internet access. Learn if you're safe in this white paper.
Rapidly Resolve J2EE Application Problems
Whether you are in the process of building J2EE applications or have J2EE applications already running in production, you must ensure that they deliver the expected ROI. Learn how in this white paper.
Load Testing 2.0 for Web 2.0
There are many unknowns in stress testing Web 2.0 applications. Find out how to test the performance of Web 2.0 in this white paper.
Build Better Games Online
For the game infrastructure providers, life is complex. Making money from games has become more complicated. Why? Find out in this white paper.
Building a Virtual Infrastructure from Servers to Storage
This white paper discusses the virtual storage solutions that reduce cost, increase storage utilization, and address the challenges of backing up and restoring Server environments.
Gaining Faster Wireless Connections with WiMAX
Welcome to what is quickly becoming the hyperconnected world where anything that would benefit from being connected to the network will be connected. Learn more in this white paper.
Is Your Desktop a Security Threat?
The new wave of sophisticated crimeware not only targets specific companies, but also targets desktops and laptops as backdoor entryways into those business’ operations and resources. Learn how to stay safe in this white paper.
Increasing SAN Reliability by 100 Percent
Storage area networks (SAN) are a strong part of storage plans. Learn how to increase your reliability and uptime by 100 percent in this case study.
|
|
|
|
|
news feed