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April 28, 1997updated 05 Sep 2016 1:06pm

SCO PLANS IMMINENT FINANCIAL “SURGERY” TO CORRECT DOWNTURN

By CBR Staff Writer

The Santa Cruz Operation Inc turned in second quarter results after the markets closed Friday that were at the high-end of its profits warning issued earlier this month (CI No 3,136). That warning would have leveled out analysts estimates with the aim of hopefully avoiding a sharp fall in its shares when they open today, Monday. But things look like they’re going to get a shake-up over at the Unix operating system and applications company. Chief financial officer since January, John Luhtala, echoing and amplifying a comment from chief executive Alok Mohan in a statement accompanying the numbers, said SCO is looking at all functional activities of the company and how they support the business to see if there are areas where belts could be tightened. However, he said that does not mean a root-and-branch restructuring: it’s surgery rather than taking a meat-ax to it, he said. He bemoaned the fact that product development in the company’s area takes such a long time. As if to prove it, SCO has revived plans to provide an end-of-life spurt for its OpenServer Unix operating systems, codenamed Comet. The company said last July that it would offer a series of maintenance releases for OpenServer before it gets merged with UnixWare in the Gemini combined Unix due sometime in the second half (CI No 2,947). Comet had been planned for mid-1996. The company will announce it at Networld+Interop next week in Las Vegas. It’s hard to see what SCO could get rid of as most of it seems pretty core to the operation, but we shall wait and see. SCO saw second quarter net profits down 67% at $974,000, on revenues that rose 7% to $54.1m. Net earnings per share fell 62.5% to $0.03 in the quarter. SCO had predicted earnings per share of between $0.02 and $0.05 on revenues between $53m and $55m. The reason for the shortfall is that old US software company chestnut, poor European sales, as well as development costs for SCO’s next generation Gemini Unix operating system and Tarantella Java applications access software.

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