The Register® — Biting the hand that feeds IT

Rackable's margins still in witness protection program

Q2 turns red

Tune into our application security webcast, click here

Rackable's new CEO suffered through a tough first 90 days on the job, as gross margins continued to vanish.

Rackable today reported second quarter revenue of $82m – a 14 per cent year-over-year rise. It also posted a $40m net loss during the period versus a $5.3m profit in the same period last year. The profit disappeared as gross margins dropped to -8.4 per cent from 23 per cent.

The company also copped to $21m in excess and obsolete inventory charges. Ouch.

"In my first 90 days, I have immersed myself in the operational aspects of the company and our supply chain and I believe there is clear opportunity to improve our market position and operating performance," said CEO Mark Barrenechea.

Former CEO Tom Barton was evicted in April, as Rackable's formerly solid results soured. The company depends on Amazon, Microsoft and Yahoo! for the majority of its business and has faced extreme competition for these accounts from rivals. ®

See what The Register's experts have to say on application security

Don’t Miss

Win a Samsung C6625!

Reg Lucky Draw Windows Mobile handsets up for grabs

Palm_Pre_001_SMIs your cameraphone an oxymoron?

Pic Review iPhone 3G v iPhone 3GS v Palm Pre

Vulture logo with head phonesWindows 7, Bing and security: Mr Ballmer regrets

Steve hopes Microsoft money can buy your love

Sign up, sign up for The Register IT security newsletter

Narrowcasting for the email classes