SCOs Revenue Continues to Plunge

Good news continues to be hard to find for SCO as it reported, after the markets close, still more losses and revenue decreases in its first quarter of 2005, which ended on Jan. 31.

The SCO Group Inc. has been locked in battles with IBM and other companies over its Unix intellectual property rights, whether any of its Unix code has been stolen into the popular Linux operating system, and other contractual matters, and has continued to see its Unix business decline without seeing any significant victories in the courtroom.

Revenue for its first quarter amounted to $8,865,000. Last year, the company had realized $11,392,000 from the comparable quarter.

Bert Young, SCOs CFO, blamed the decrease on "the continued competitive pressures on the companys Unix products and services."

Multiple industry studies have shown Intel-Unix customers, the core of SCOs business, moving from Unix to Linux for their server operating system needs.

In addition, SCO still has not been able to make headway with convincing users that they should pay SCO for its Unix intellectual property. The branch of SCO concerned with this revenue stream, SCOSource, reported gross income of only $70,000.

SCO was able to report one small silver lining to its financial gray clouds for the second quarter.

Young said that the company had recently sold its holdings in TrollTech, a software development company, for over $800,000.

Since SCO had previously written this investment off, all of this amount will be taken as revenue in this still ongoing quarter.

Still, the net loss attributable to common stockholders for 2005s first quarter $2.961 million, or 17 cents per diluted common share, as compared to a net loss attributable to common stockholders of $2.486 million, or 18 cents per diluted common share for the prior years comparable quarter.

"Despite the decline in revenue, we successfully implemented efficiency and cost reduction measures that have had a positive impact on operations and contributed to the Unix business operating profitably," said Darl McBride, SCOs CEO.

"We remain steadfastly focused on winning in both the court room and in the marketplace. We are continuing to develop new products and services for the Unix platform that will benefit our customers," added McBride.

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