VA Linux meets reduced estimates in first quarter

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VA Linux Systems met analysts' reduced estimates in its first quarter Thursday but still posted a loss of $7 million, or 15 cents a share, on sales of $56.1 million.

First Call Corp. consensus expected the Linux-based software developer to lose 15 cents a share.

Ahead of the earnings report, VA Linux (Nasdaq: LNUX) shares closed off 63 cents to a 52-week low of $12.

Analysts originally pegged VA Linux for a loss of 9 cents a share in the quarter but lowered their estimates earlier this quarter when the company warned that sluggish demand from new dot-com customers would result in lower sales and wider losses.

"While top and bottom-line results did not meet our expectations for the quarter, we remain optimistic about our prospects for growth in the future," said CEO Larry Augustin in a prepared release. "We remain committed to profitability, excluding non-cash charges, no later than the end of calendar 2001 and we anticipate revenue for fiscal 2001 to be approximately 2.25 times fiscal 2000 revenue."

The $56.1 million in sales represents a 278 percent improvement from the year-ago quarter when it lost $7.2 million, or 27 cents a share, on sales of $14.8 million.

In the quarter, it posted a net loss of $51.3 million, or $1.12 a share compared to a loss of $10.1 million, or $2 a share, in the year-ago quarter.

Last quarter, VA Linux topped analysts' estimates when it posted a loss of $4 million, or 10 cents a share, on sales of $50.7 million.

The stock moved as high as $320 a share in December before closing at an all-time low Thursday.

Five of the six analysts following the stock rate it either a "buy" or "strong buy."

Analysts are forecasting a loss of 41 cents a share in the fiscal year.