SCO reports further losses

By Matt Whipp

Posted on 2 Jun 2005 at 15:34

Unix company SCO posted its fifth consecutive loss late yesterday to the tune of $1.9mn or 11 cents a share for the second quarter.

Despite increased efficiencies in running its Unix business, revenues for that segment were still down roughly $1mn on the corresponding quarter for 2004, at $9.25mn. This, said SCO, is in line with the market trend as the Unix space is eaten into by the likes of Linux.

However, the legal costs associated with its ongoing litigation against IBM and others - coupled with its continued efforts to licence its claimed Unix IP to Linux customers - dwarfed the paltry $30,000 revenues it saw with a bill of $2.9mn.

'Our core UNIX business remained profitable in the second quarter as expected, and we saw increased revenue over the prior quarter as a result of improved performance across all geographies,' said Darl McBride, President and CEO, The SCO Group. 'We have continued to focus our Unix business on commercial success in the market place and look forward to launching SCO OpenServer 6 later this month. At the same time, our SCOsource business remains committed to pursuing our legal strategy in the courtroom, and we are well-positioned to see our litigation through to its conclusion.'

The company says it intends to spend around $11mn on its litigation efforts over the next year - more than half of its current cash and other assets position - and will continue to depend on a profitable Unix business to see it through.

Along with IBM, it is also in court with Novell, Autozone, DaimlerChrysler and Red Hat. But in a recent SEC filing the company says it expects the Unix market to continue to decline and that 'hardware and software vendors, as well as software developments, will continue to turn their certification and application development efforts toward Linux and elect not to continue to support or certify our UNIX operating system products'.

Still, the company says there remains room to squeeze even more efficiencies out of its Unix business, keeping costs down.