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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.
Software giant weathers well, Intel slips 15%.
Guess I know where to invest my money *grins*
Actually, looks more appropriate to upgrade my firewall. One linux product that tends to work well out of the box... tho I wish it was more secure by default. I don't think I've had any trouble installing it and running... unlike BeOS which failed 8 out of 10 times.
Given the statement in this press release, things aren't looking good for next year, either:
The company reported an adjusted net income of $600,000, or break even per share, for the first quarter of fiscal 2002, compared to an adjusted net loss of $3.7 million, or $0.02 per share, for the first quarter of fiscal 2001.
Employing those psychic accountants must be very lucrative!
-Waldo
Look at VA's stock. All time low. Last time I checked at $0.92
:-(
Things are looking bleak for Linux companies
Good quote, too many chars. Seriously, the slashdot 120 char limit sucks!
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.
"Not my manner of thinking but the manner of thinking of others has been the source of my unhappiness." - M
This isn't surprising. Lemmie add Intel, AMD, and Transmeta into the mix. Looks like all tech stocks are hitting low. Not to mention that stocks dropped drastically after last tuesday.
Good quote, too many chars. Seriously, the slashdot 120 char limit sucks!
... if they could convince AMD not to call their future CPUs for AthlonXP rather AthlonRedHat.
Look a monkey!
I just don't know why in last quarter's report Red Hat loss $400,000 (as I recalled) and says break even because the loss is less than 1c. Now they say loss $100,000 and then loss 2c per share. How's the math?
Then, FYI, this $100,000 loss doesn't include one-time charges and/or costs which would total the loss to $55.3 million. Is there any "accounting tricks" applied to spiff up the reports or what?
Your answer is appreciated. Thanks.
--
Error 500: Internal sig error
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.
Here's a cheap one for you. And if I remember correctly from last time I was in a CompUSA store, 7.0 was even cheaper.
After that date, all bets are off, however... How might the aftermath harm/help Linux/Open Source? Seeing this story, I expect Microsoft's IIS is now a very serious liability. Also, MS plans to continue on schedule with XP rollout in NYC...
A feeling of having made the same mistake before: Deja Foobar
Yeah, they're doing such a good job that the Young and Buckley are offloading shares as fast as they can.
It might take a while to kick in, but Redhat potentially can do well because OSS software is so much cheaper than much of the commercial software. There may be arguments that it takes more manpower to deploy, and it's not turn-key so it takes longer to bring to market -- many of these arguments might be valid (at least some of the time). But the value of cash vs. the value of time might be shifting -- cash has become more valuable. Leaner endevours would be well served to use OSS.
OTOH, if you really want to save money, why pay money for the support and the box? Linux is pretty much free. Still, even if I don't particularly care for Redhat (the distribution), I wish them well and am optimistic about their fate.
> Between this and the fact that RedHat's stock is at an all-time-low (just look at the charts over on Nasdaq [nasdaq.com]) we have some SERIOUS troubles for Linux. I wonder if Linus has heard about this problem yet?
I wonder whether Linus thinks Red Hat's share price is a problem.
Sheesh, evil *and* a jerk. -- Jade
Seriously, all they're doing is playing book-keeping tricks to pull the wool over your eyes. Doesn't it seem fishy how for the last three quarters they come within $100,000 of breaking even each time? Come on. When you actually read the articles and look at the numbers, though, you see that they're losing from $30-$50 million each quarter and writing it off as one-time charge. Someone else will have to explain how they manage to apply these supposed "one-time" charges every single quarter. ;)
In other words, if RedHat were to keep "making money" at the same rate that they have for the last three quarters, they would run out of money not all that long from now.
Your rendition of Bill Gates is almost as bad as your rendition of the Windows logo.
My only political goal is to see to it that no political party achieves its goals.
You can also get an iso containing a modified Redhat 7.1 installer that will create XFS partitions.
I believe there are a couple of kernel patches that add support for ACLs.
My only political goal is to see to it that no political party achieves its goals.
Odd that Slashdot, a VA-owned website, will report on Red Hat's losses, but somehow neglect to inform their readers that VA Linux Systems stock has finally slipped into penny-stock territory as of yesterday, closing at a whopping $0.95/shr.
But wait..that would mean that VA is fair and impartial when it comes to informing the Linux community..hmm.
Bowie J. Poag
ask redhat if they accept donations, or if you buy distros, buy the distros directly from them. Retailers probably will pocket most of the money that you give them(they gotta make a profit too). So if you're concerned about 100% of the money you are spending going to red hat, just do one of the 2 above.
Got Freedom?
Thinking?
You're forgetting quite a few of your assumptions there...
Among them:
1) better products naturally dominate the marketplace
2) the timeframe over which products "obliterate" competition is less than the current age of Linux (or more acurately, the length of time Linux has fit the definition of "better" product).
Somehow, I doubt you can support either of these assumptions...
Doug
Venn ist das nurnstuck git und Slotermeyer? Ya! Beigerhund das oder die Flipperwaldt gersput!
I feel really uncomfortable when people wonder whether open source software can have a profitable business model.
My company makes plenty of money by supporting the computer operations of businesses. My company provides the software at cost, without profit. The cost of the software is small compared to the support costs for training, hardware and software glitches, and specialized programs.
Open source software is more reliable, but support is still needed.
Red Hat, and other companies that provide support for open source software, are unbelieveably terrible at marketing. They just have no clue. That's part of the reason they have trouble making money.
If Microsoft were as bad as Red Hat at marketing, Microsoft would still be trying to sell Microsoft Basic. What's worse, Red Hat is better than most of the others at marketing.
When I look at most open source projects, I can't even understand the home page! Even the home pages are written with the idea that you work on the project, so you already know everything.
If you have a project involving GNU/free software, and need help with communicating to your prospective users, I may be able to help, as a volunteer. Send me email. Even when software is free, there is still a need for marketing communication.
Want to understand the situation in the middle east? Read What Should be the Response to Violence? . Most important lesson? Understanding the corruption in the secret agencies of the U.S. government. They have a conflict of interest; they are supposed to help prevent trouble, but they get more money if there is more trouble.
Bush's education improvements were
So by your logic, M$ must be doing about 30 times worse than Redhat.
Being delisted means that they are not traded on the larger stock exchanges anymore. It's a huge knock on the company's prestige but it's not at all like chapter 11. They company will still be in business and it will be traded on the "pink sheets". There are markets filled with companies like VA Linux on those exchanges.
There are a number of things that must happen to get delisted. Some of them include trading below $5 for an extended length of time, having a market cap under $50 million, etc. (I don't pretend to have them memorized. I'm just fimiliar with them because I worked for a failing company.)
Anyway, even with all the methods of staying listed it seems to me that VA Linux is in danger, just like you pointed out.
That which does not kill me only makes me whinier
Compared to the other server-grade OS (win2k) this is more than reasonable - 2k server runs $800 off the shelf, I think. (never bought it that way) You have additional licensing fees on top of that. And you get some pretty good support from RH if you pay.
You can get the distro images for free from their ftp site if you have the bandwith. So the price isn't that bad.
Well, last quarter when they earned $600,000, they released Red Hat 7.1, which may have helped their sales numbers. There was no distro release this quarter.
However, 7.2 should come out shortly, and it will almost certainly drive their numbers up again.
Not that distros is all they sell, but it does help and could easily be the difference between quarters.
Normally a story like that would have made at least passing mention to the layoffs RH is taking, if for no other reason than to make the institutional investors happy (because they'd see them as "belt tightening" or some such). But this one makes no mention of them. The closest it comes is saying they "restructured [their] operations".
Could it be that the reporter doesn't really know that much about the company? Or possibly they don't want to draw any parallels with the others in the dot bomb crowd for fear of tainting RH's staggering $3.11 share price? Or maybe then someone would ask which areas did they cut (to make sure it was fat and not mussle that was being trimed) and then they'd have to explain that some of it was part of the very group that they had just mentioned was responsible for "[a] significant portion of that revenue"?
I asked this in another thread several days ago.
Someone pointed out that NASDAQ has relaxed these rules quite a bit, because otherwise they would have no stocks to trade at all.
I doubt you can support your assumptions by defining the word "better."
Redhat have enough cash to sustain them for well beyond 10 years with their current cash burn, so I wouldn't worry to much.
Within the last year, Nasdaq was trading at extremely inflated levels. That people choose to sell at those levels isn't exactly very surprising. When the economic climate starts improving again I bet you'll see more than enough insiders buying back shares they sold the last year, but for a fraction of the price.
Most of that is writing down goodwill and intangibles. It is not cash expenses. Which is important. If they'd lost 53 million cash in a quarter, they'd run out of money quickly. But as it is, they hardly dipped into their cash reserves this quarter.
Goodwill props up the assets side in a companys financials, and that is good. But it has to be written down over time. Sometimes a company will write it down as slowly as possible, in order for it not to affect their earnings. In this case Redhat has chosen (or been forced to - I don't know what rules are used in the US to determine when they have to write down goodwill) to write down a significant amount in one quarter.
Yes, this is a loss. But it is not a loss of cash, but of abstract, intangible values.
In fact, according to their financials, at the end of this quarter, Redhat had 299,9 million USD in cash. On February 28 they had 302.7 million USD cash. So in the last 6 months, their cash position has only been reduced by 2.8 million.
And if you look at total assets, you will find that their current assets are estimated at 428.2 million USD (of which 82.4 million are goodwill and intagibles), vs. 505.3 million USD (with 147.4 million USD in goodwill and intangibles) on February 28.
This means that in the last 6 months, they have written down 65 million. Excluding the write down of intangibles, their assets have only dropped 12.1 million USD
The difference between that number and the reduction in cash comes from reduced outstanding invoices and prepaid expenses.
In addition, their liabilities now are slightly lower than 6 months ago, meaning that the picture is more positive that it looks (about 2.2 million USD difference).
In other words, Redhat is doing very well considering the economic climate... And also that they have cash to run for many years at their current cash burn before they actually have to start making money.
Also note that they have accrued a significant loss in the past which can be used to reduce their taxes once they earn money.
(Disclaimer: I own a few Redhat shares. And the above should not be taken as investment advice. Go do your own research. Yada, yada, yada)
Marketing in this case just means communicating with prospective users. It's sad, but open source projects are often not used because other people have no easy way of understanding them.
Sure, I could go through the source code. But that takes time, and, obviously, I can do that only with a few projects.
The term "marketing" gets a bad name because there is so much dishonest marketing. Honest communicating with prospective users is needed in any project, however.
Bush's education improvements were