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 newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Todd R. Weiss

Computerworld
Show Comments

Essentials

Mobile

Victorinox Werks Professional Executive 17 Laptop Case

Learn more >

Exec

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?