VA Linux to suffer larger loss

SV News Service


Sunnyvale

VA Linux Systems, the premier Linux server company continues to suffer from a string of quarterly losses despite strong revenue growth. VA Linux has said that the slowing economy has caused its loss for the current second quarter of fiscal 2001 to be larger than expected. A year ago, VA lost $ 11.6 million on $ 20.2 million in sales. The quarter's sales are expected to be in the $ 40-50 million range.

The company's shares are trading at $ 9 a share. When it went public in 1999, the shares shot up from $ 30 to $ 310 on the first day of trading, setting a stock market record. The issue has been going down almost ever since as investors have lost their appetite for Linux-oriented stocks.

Larry Augustine, CEO, VA Linux Systems, has said that the overall economic slowdown is hurting sales of all of VA Linux's products, from Linux servers to banner advertisements on the company's websites.

Sales growth has also taken a hit. Instead of an earlier forecast of 120 percent sales growth in 2001, VA is now

forecasting an overall 60 percent improvement.