SCO reports third-quarter results

The SCO Group unveiled third-quarter net income of $3.1m, compared with a net loss of $4.5m for the same period last year. The...

The SCO Group unveiled third-quarter net income of $3.1m, compared with a net loss of $4.5m for the same period last year. The figures were buoyed by new revenue for Unix licensing fees for enterprise Linux users.

SCO said it earned $20.1m in revenue for the quarter, which ended 31 July, compared with $15.4m in revenue the previous year. The third-quarter revenue figure includes $12.8m from sales and support of its Unix operating systems and $7.3m from the company's SCOsource licensing initiative, which began in January when SCO started enforcing its intellectual property rights on Unix. 

The revenue from sales of its Unix operating systems is down $2.6m for the quarter, compared with $15.4m a year ago. The company's overall revenue is up because falling Unix sales were more than offset by the new licensing fees. 

The revenue from the SCOsource licensing programme has been coming in since SCO filed a $1bn lawsuit against IBM in March, alleging that IBM illegally put some of SCO's protected Unix source code into the open-source Linux project. The lawsuit was later amended to include additional claims and now seeks at least $3bn from IBM. 

Last month, SCO announced that it would sell special Unix licences to allow enterprise Linux users to use Linux legally without violating SCO's alleged intellectual property. On Monday, SCO said it had signed up its first licensee, an unnamed Fortune 500 company, for the special Linux/Unix licences. 

"Our SCOsource initiative continues to gain momentum as we pursue enforcement of the company's intellectual property rights," said Darl McBride, SCO's chief executive officer and president.

"This is our second consecutive quarter with net income and positive cash generated from operations. These results have strengthened our balance sheet and overall financial position. We intend to use this capital to continue our intellectual property protection and licensing initiative as well as for launching SCOx, our web services strategy. 

"The magnitude of our SCOsource licensing opportunities and our confidence in the SCOsource revenue pipeline is growing each quarter," McBride said. 

Many corporate Linux users, meanwhile, are sitting on the sidelines waiting to decide whether to pay the licensing fees, since no court has yet ruled on SCO's claims. SCO has publicly warned companies using Linux that they could potentially become legal targets over the issue. 

For the first nine months of fiscal 2003, SCO earned net income of $6.9m on revenue of $55m, compared with a net loss of $22.1m on revenue of $48.8m for the comparable nine-month period of fiscal 2002. 

SCO said it expected revenue for the fourth quarter, which ends 31 October, to be in the region of $22m to $25m.

Todd R Weiss writes for Computerworld

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