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The drying up of VC money for dotcom start-ups has had a knock-on effect, on VA Linux, the wanna-own-everything to do with Linux company.

It has issued a profit warning today, in which it blames the lack of new business from venture-funded dotcoms on lower than expected revenues for Q1. This will in turn lead to a cash loss for the quarter of between $0.14 to $0.16 per share. It has now downgraded revenue forecasts for this financial year (fiscal 2001)to 2.25 times higher than last year. Previously it was quoting two-and-a-half times.

Repeat business is doing fine, and business is up 10 per cent sequentially on the previous quarter, the company says. Only problem is, VA Linux has been spending on the basis of expected revenues for the quarter - and hence the loss.

The company reckons it will pull into profit by the end of calendar 2001. ®

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