SCO Group Continues to Bleed Red Ink

Published: June 15, 2006

by Timothy Prickett Morgan

Commercial Unix distributor SCO Group has announced its financial results for its fiscal second quarter ended April 30, and as has been the case in prior quarters, the company's Unix software and support business continues to decline and losses continue to mount.

In the quarter, SCO booked sales of $7.1 million, down 23 percent, and its net loss doubled in size to $4.7 million, or 22 cents a share. As in the past, SCO attributed the sales decline to competitive pressures on its Unix products and services, and said its bottom line has been adversely impacted by litigation costs in its lawsuit against IBM concerning Unix intellectual property issues. That case goes to trial on February 26, 2007. With $18.6 million in cash at the end of April, SCO seems to have enough cash on hand to make it to trial and through it, even if sales drop quiet a bit further.

Darl McBride, SCO's president and chief executive officer, put the best face forward on the numbers in a statement. "Despite our revenue decline and net loss, we remain committed to and optimistic about our business strategy. We are encouraged by the progress we are making in the development and deployment of our EdgeClick mobile development platform and Me Inc. mobile services. Unlocking the value of our core Unix business will be difficult until we resolve the issues raised by our intellectual property litigation."