The SCO Group Inc., currently pursuing a multi-billion dollar lawsuit against IBM over the Linux operating system, announced losses for the second quarter that more than doubled those of the same quarter last year.
SCO said on Thursday that it lost nearly $4.7 million from February to March, or 22 cents per share, blaming a large portion of the loss on ongoing litigation costs. The same quarter last year saw a loss of $2.4 million, or 11 cents per share.
Unlocking the value of our core UNIX business will be difficult until we resolve the issues raised by our intellectual property litigation, Darl McBride, president and chief executive officer said during a conference call.
The $50 billion civil suit which SCO filed in 2003 alleged that IBM's support and development of Linux had violated non-disclosure contracts about computer code found in the SCO's licenses of the UNIX operating system, which Linux is based on.
Linux is a free popular alternative to the Microsoft Windows operating system in the server market, which proponents say has flourished due to the community effort of volunteer developers. Those contributors have included employees from large corporations such as IBM. Some fear that SCO's legal challenge for patent infringement could stiffle the growth and popularity of Linux.
Bert Young, SCO's chief financial officer, said during the conference call with analysts that litigation costs included $700,000 for law firm Boies, Schiller & Flexner; $2.8 million for an escrow for expert, technical and damage reviews along with other law firm costs. He added that $300,000 were spent for internal SCO costs.
The company's earnings report stated that revenue fell to $7.1 million for the quarter ending April 31, nearly $2 million less than the $9.3 million in revenue generated in the same quarter last year.
SCO reported that it had cash and cash equivalents and available-for-sale marketable securities of $18.6 million at the end of the most recent quarter.
Considering that, Young said, the company believes it will be able to execute on its business strategies and see its intellectual property litigation through to its conclusion.
Shares of SCO fell 1 cents, or .47 percent to $2.14 on light volume over the New York Stock Exchange.