Linux vendor Red Hat suffers Q2 loss of $55.3 million

The red ink continues for Linux market leader Red Hat Inc., which yesterday reported net losses of US$55.3 million for the second fiscal quarter ended Aug. 31.

That compares with a net loss of $27.6 million for the first fiscal quarter of 2002, which ended May 31.

The Research Triangle Park, N.C.-based company said in a statement that the losses were reduced on paper to just $100,000 after taking a restructuring charge of $37.2 million and other adjustments.

That $100,000 adjusted net loss compares with an adjusted net loss of $4 million for the same period one year ago.

The restructuring charge of $37.2 million includes $33.8 million in goodwill and intangibles related to acquisitions made in prior periods and $3.4 million in severance-related expenses.

Red Hat reported revenue of $21.1 million for the quarter, which is down 15 percent from revenue of $25 million one year ago. It's also down by 17 percent from the first quarter of fiscal 2002, when revenue was $25.6 million (see story).

Yesterday's news comes after Red Hat reported a $600,000 profit for its first quarter on an adjusted basis for the first time in its history.

Matthew Szulik, Red Hat's CEO, said the company is shifting its focus from retail box sales of its open-source operating system to developing closer ties with its business customers. "It's a transition from sales and marketing to a more integrated relationship with customers," he said.

Red Hat will now direct its sales and support efforts at business customers that are looking at Unix to Linux migration opportunities and toward a promising and developing market in embedded systems, he said.

The company will also have announcements in the next 60 days for new products sought by enterprise customers, including entries in the security market and the high-availability market, said Szulik Red Hat is taking the right approach by emphasizing its opportunities in the embedded systems market, said Bill Claybrook, an analyst at Aberdeen Group Inc. in Boston.

"They really have acknowledged that they hadn't done a good job with their embedded systems," he said. The company has the tools to do that and is finally building a marketing team that will be able to showcase its abilities, Claybrook added.

"They had sort of been lagging behind," he said.

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Todd R. Weiss

Computerworld
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?