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SCO's Unix slide continues in Q4

The future is Me and the lawsuit

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The SCO Group's revenue continued to fall in the fourth quarter and during fiscal 2005, as Unix sales slumped. Management, however, tried to put a positive spin on the results, released after Thursday's market close, saying that cost-cutting measures have made SCO's Unix business profitable again and adding that plenty of cash remains to continue a legal battle against IBM.

In the fourth quarter, SCO pulled in $8.5m, which is a sharp drop from the $10.1m in revenue reported in the same quarter last year. "This decrease in revenue was primarily due to a decrease in Unix revenue as a result of continued competitive pressure on the company's Unix products and services," SCO said. One positive in the period came as SCO managed to trim its fourth quarter loss to $3.4m, as compared to a loss of $6.5m last year.

"Even though the company incurred net losses during the fourth quarter and fiscal year 2005 as a result of expenditures for its continuing litigation, the management team accomplished its objective of returning the Unix business to profitability and generating positive cash flow during fiscal year 2005," said Darl McBride, SCO's CEO. "While we will continue to focus resources on our Unix business and expect this business to generate positive cash flow again in fiscal year 2006, we are excited about the prospects of our recently announced Me Inc. technology platform for smart handheld devices.

"Additionally, with the closing of our $10 million private placement in November 2005, we are confident that we will be able to execute on our business strategies and see our litigation through to its conclusion."

For the full year, SCO reported revenue of $36m – a significant drop from the $42.8m posted in 2004. SCO's net loss for 2005 came in at $10.7, which compares to a net loss of $16.2m last year.

SCO announced its Me Inc. technology in September, describing it as a set of services for handheld devices and browsers. As part of the platform, SCO is pitching the Shout service which "helps individuals communicate to small teams or audiences of many thousands at once" and the Vote service for online polling.

The infamous SCOsource licensing program, where customers can buy a type of insurance to protect them against being held liable if SCO wins its Unix and Linux battle against IBM, continues to flounder. SCO made just $34,000 off the program in the fourth quarter as compared to $120,000 in the same period last year. For the full year, SCO brought in $166,000 from the licensing effort versus $829,000 in 2004. ®

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