BusinessWire -- VA Linux Systems today announced that it expects
revenue for the second fiscal quarter, ended January 27, 2001, to
be $43 million to $50 million, an increase of 115% to 150% from the
second quarter of fiscal 2000. It expects the loss for the quarter,
excluding non-cash charges, to be in the range of $0.28 to $0.24
per share. (Editor's note: Wall Street analysts had expected a
loss of 14 cents a
"We are in the midst of an overall economic slowdown which is
affecting all of our sources of revenue, ranging from Linux servers
to Web advertising banner sales," said President and CEO Larry
Augustin. "The fiscal second quarter has traditionally been slow
for us because of fewer selling days around the holiday season.
However, thus far in January we have not seen the acceleration of
business we normally see after the holidays. We believe the major
contributing factor is the overall economic slowdown. Given the
slowdown, we now expect revenue in fiscal 2001 to increase 60% over
revenue for the previous year. This is a reduction from the
guidance given previously of 125% year-over-year growth."
"Additionally, the current economic conditions are creating a
difficult pricing environment resulting in lower gross margins.
Going forward in this economic environment, we intend to focus on
higher margin business and to manage expense levels such that we
can achieve profitability given our revised revenue
Actual results will be announced on February 20, 2001 after the
market closes, followed by a 2:00 P.M. PST conference call.