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CNET News.com: VA Linux beats estimates on revenue surge

Aug 24, 2000, 02:34 (0 Talkback[s])
(Other stories by Stephen Shankland)

"The company's sales came chiefly from sales of rack-mountable servers used to build up Internet infrastructure, chief executive Larry Augustin said in an interview today. The most popular product is 3.5 inches thick, but future demand is moving two models 1.75 inches thick, he said. In addition, the company expects sales of servers packed with hard disks to be popular."

"Augustin predicted revenue next fiscal year 2.5 to 2.75 this year's $120 million--$300 million to $330 million, but that still likely won't be enough to carry the company to profitability. "We're expecting to be in the black by the end of calendar 2001," the second quarter of VA's fiscal year, Augustin said. WR Hambrecht analyst Prakesh Patel sees VA's profit margins increasing. Several acquisitions by VA "show the solid progress VA has made" in shifting its revenue stream to high-margin professional services, hardware and software integrated to work together. The company's products sell to Internet service providers, customers needing data storage and Internet infrastructure, and all [are] high-growth markets."

"VA's results mean Linux companies have surpassed analyst expectations twice in two days. Linux seller Caldera yesterday reported a loss of 19 cents a share when analysts expected a loss of 25. Caldera, though, had revenues of $1.2 million, much less than VA's."

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