Red Hat Reports (tiny) Loss, Revenue Slip

Futurepower(tm) was one of the first to write with the news Red Hat reports loss, revenue slips, via Infoworld. Szulik ^? is right in his statement that compared to what's going on in the overall technology segment, RH is doing a good job.

Comments

As Much as people hate redhat

[ConsumedByTV]

They are giving a good name to Linux in a few ways. If we didnt have them, linux would still be here (even for the better some might say) but I am sure that it would take people some time to adjust. They need something to hold onto in their head as a sign of quality. Colors and shapes comprise good names, just like a logo that can be drawn in the sand is constant reminder of how it (a company name) sticks with us. Redhat might not be the best (or perhaps you think they are) but they are doing something with Gnu/Linux that might have taken years to do. Thank them for that.

Before getting carried away...

[augustz]

Before getting carried away:

Red Hat's second-quarter net loss was $55.3 million, on revenues of $21 million.

Granted, they've got PR speak down, and slashdot falls over itself reporting these "breakevens". But they've systematically excluded items in almost every quarter they have reported results, and the number slashdot reports are pretty bogus. Most other sites AT LEAST report generally accepted number (GAAP) along with the PR numbers which exclude all losses.

So let's hope they do well, but please for the love of god lets stick to numbers that are not simply pulled from a hat. And despite what folks like to say about how this gives insight into their business, these numbers are by and large bogus.

Re:Before getting carried away...

[miniver]

Before you get too carried away...

Red Hat's second-quarter net loss was $55.3 million, on revenues of $21 million.
Granted, they've got PR speak down, and slashdot falls over itself reporting these "breakevens". But they've systematically excluded items in almost every quarter they have reported results, and the number slashdot reports are pretty bogus. Most other sites AT LEAST report generally accepted number (GAAP) along with the PR numbers which exclude all losses.

Apparently you haven't been paying attention to the way accountants keep track of earnings for publicly traded companies. RedHat did the same thing that everyone from Microsoft and GM on down do: they reported their earnings and losses for the quarter, as well as any other earnings and losses that are required to be accounted for in the current quarter, even though they may have been accrued in previous quarters and years.

To get a better picture, go to the SEC EDGAR database and search for Red Hat's latest 10-Q filing (the latest one I found was filed in July for the quarter ending May 31st, 2001). If you read through the 10-Q filing, you'll see that in any given quarter, half of Red Hat's expenses are from the write-down of investments (ie: the stock market has tubed in the last year) and the amortization of goodwill and intangibles (ie: artificial value of companies during a merger). This is Generally Accepted Accounting Practice (GAAP) -- Red Hat traded millions of shares away to aquire Cygnus and other companies, and instead of realizing all of the associated costs of those mergers in a single quarter, the costs are spread across several quarters.

Look at the bottom line -- at the beginning of the quarter, Red Hat had $72,459,166 in the bank, and even if they lost $24 million, that still leaves them with $48 million in the bank, and these paper losses will be ending in another quarter or so, which will leave Red Hat breaking even. Pretty good for any tech company in the current economy.

Red Hat's funny math

[jmcnamera]

While Red Hat says they almost made a profit, its only by excluding other, huge expenses. 37.2 million was excluded, the net loss is 55.3 million. The number to look at is that their earnings went down 15%. This is bad news for Red Hat. Someone in another post said that the price of Red Hat has gone too high. I disagree, you buy one and make copies.