RSA Security Inc. on Wednesday reported a net loss of $25 million for the second quarter, compared to a net profit of $13.3 million in the same period last year. Revenue was also down, falling to $56.5 million from $80.8 million in the second quarter of 2001.
RSA executives attributed much of the net loss to the $22.7 million restructuring charge the company took as well as a charge of $8.5 million for a decline in the value of RSAs investments. The Bedford, Mass., company originally anticipated the restructuring costs would total no more than $10 million.
RSA also announced that its chief financial officer, John Kennedy, is retiring at the end of July and will be replaced by Jeff Glidden.
RSA blamed the drop in revenue on the continued weakness in IT spending.
"Make no mistake about it, its still a difficult selling environment out there. The selling environment is still oppressive," said CEO Art Coviello. "You need look no further than the disappointing results of the other e-security vendors."
Coviello also took investors and analysts to task for losing confidence in RSA and the high-tech sector in general.
"As an industry and as investors, we are falling prey to irrational pessimism," he said, parodying Federal Reserve Board Chairman Alan Greenspans oft-repeated comment about "irrational exuberance" driving the Internet stock bubble. "This quarters performance certainly underscores the underlying strength of our business."
The company expects to have revenue of $54 million to $58 million in the third quarter, with results ranging from a net loss of $0.02 to a profit of $0.02.
Meanwhile, Entrust Inc., one of RSAs main competitors, posted a loss of $4.8 million for the second quarter, on revenue of $26.5 million. This is a dramatic improvement over the companys $449.9 million loss in the same period last year.
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