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Upside/Reuters: VA Linux cuts staff; loss bigger than expectedFeb 20, 2001, 23:13 (2 Talkback[s])
"VA Linux Systems (LNUX) today posted a quarterly loss that exceeded Wall Street's lowered forecasts, leading it to slash 25 percent of its workforce in a bid to turn a profit amid the U.S. economic slowdown."
"The loss was wider than Wall Street expectations of 26 cents a share as calculated by research firm First Call/Thomson Financial, and was on the lower end of guidance given by the company last month, when it said the slowing U.S. economy meant the loss would be between 24 and 28 cents a share. Revenues for its fiscal second quarter more than doubled, to $42.5 million from $20.2 million a year earlier, again at the low end of forecasts of $43 million to $50 million."
"To try to achieve profitability at lower revenue levels, the company said it would cut 25 percent of its 556 workers. It would also take an unspecified restructuring charge in the third quarter, Augustin said. VA Linux said it had set up additional reserves of $14 million to cover excess inventory and $2.5 million in reserves for potentially uncollectable accounts receivable."
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