Message-ID: <18119382.1075857220303.JavaMail.evans@thyme> Date: Fri, 17 Nov 2000 01:07:00 -0800 (PST) From: fool@motleyfool.com To: benjamin.rogers@enron.com Subject: Breakfast With The Fool: VA Linux Down, But Not Out Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: The Motley Fool X-To: benjamin.rogers@enron.com X-cc: X-bcc: X-Folder: \Benjamin_Rogers_Dec2000_2\Notes Folders\Discussion threads X-Origin: Rogers-B X-FileName: brogers.nsf _________________________________________________________________ B R E A K F A S T W I T H T H E F O O L Friday, November 17, 2000 benjamin.rogers@enron.com _________________________________________________________________ REGISTER TO BECOME A FOOL -- GET FREE STUFF! http://www.fool.com/m.asp?i=200166 _________________________________________________________________ Sponsored By: FOLIOfn Instead of picking stocks one at a time, now in one simple transaction buy a whole portfolio of stocks for a low flat fee. FOLIO investing from FOLIOfn. Click for a Free Trial! http://www.lnksrv.com/m.asp?i=200167 "Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it -- even though others may hesitate or differ." -- Benjamin Graham VA LINUX DOWN, BUT NOT OUT Open-source software provider VA Linux reported first-quarter results, meeting revised expectations. By Mike Trigg VA Linux (Nasdaq: LNUX), which makes software and computers using the Linux operating system, reported its first-quarter outcome after the market's close yesterday, in-line with revised estimates. It was less than two weeks ago when the Freemont, California-based company warned results would fall short of expectations, citing slow sales growth from dot-com customers. The market reacted harshly from that news with shares plummeting 42% in one day. Excluding non-cash items, VA Linux's fiscal first-quarter (ended October 27) net loss was $7 million, or $0.15 per share, compared to a net loss of $7.2 million, or $0.27 per share, in the year-ago period. The Street had expected a loss of $0.09 per share prior to the warning. On the top line, the open-source software provider reported $56.1 million in revenues, compared to $14.8 million in the same period last year. "While top and bottom-line results did not meet our expectations for the quarter, we remain optimistic about our prospects for growth in the future. We remain committed to profitability, excluding non-cash charges, no later than the end of calendar 2001, and we anticipate revenue for fiscal 2001 to be approximately 2.25 times fiscal 2000 revenue,'' said President and CEO Dr. Larry M. Augustin. VA Linux's stock, which closed last night at $12, is down significantly from its 52-week high of $320. Clearly, the days of unabashed enthusiasm for Linux stocks are gone. However, investors continue to keep companies like VA Linux on the radar, and being profitable one year from now would help the company's prospects. Management's ability to control costs while growing revenues is critical. The other key to success will be monitoring the commercial acceptance of Linux-based products, particularly among Fortune 1000 companies. The fact remains that Linux products are still something that appeal more to techies, and until that changes investors will continue to have doubts about VA Linux's ability to succeed _________________________________________________________________ NEWS TO GO Caffeine haven Starbucks (Nasdaq: SBUX) announced fourth-quarter earnings after the market's close yesterday. The company (excluding non-cash items) reported income of $43.8 million, or $0.22 per share, compared to $32.4 million, or $0.17 per share, a year ago. That's a 35% increase. The Street consensus called for the company to earn $0.22 per share. Revenues for the quarter were $582 million, compared to $475 million a year ago. Including non-cash charges to write down Internet investments, Starbucks' profit was $0.01 per share. Same-sales stores grew 10%. Southeastern U.S. local-phone company BellSouth Corp. (NYSE: BLS) announced it expects earnings per share to grow between 7% and 9% next year. The company previously forecasted 13% to 15% growth. According to a spokesperson, the new estimate includes the cost of entering Colombia and adding more customers for digital subscriber line (DSL) Internet access, which was not factored into the original forecast. BellSouth expects customers for DSL service to expand threefold to 600,000 next year, reducing earnings by $0.07 per share. Colombian acquisitions are expected to cut earnings another $0.06 per share for the year. Computer networking chipmaker Marvell Technology Group (Nasdaq: MRVL) reported third-quarter results after the market's close last night, exceeding Street expectations. Marvell's net income was $1.8 million, or $0.02 per share. Excluding stock compensation costs, profit was $3.4 million, or $0.04 per share, compared to $5.5 million, or $0.07 per share, a year ago, exceeding Street expectations by a penny. Revenue came in at $36.2 million, a 54% year-over-year increase. Semiconductor company Dallas Semiconductor (NYSE: DS) announced that Chairman, CEO, and President Vin Prothro died yesterday after suffering a heart attack. Prothro founded the company in 1984 and had served in his current duties since its inception. The company announced its board would meet soon to start the process of naming a successor. The 58-year-old Prothro had no history of heart problems. Before trading was halted, Dallas Semiconductor shares dropped $1.19 to $36.88. 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Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. . MsgId: msg-4250-2000-11-17_8-59-09-3234947_2_Plain_MessageAddress.msg-09:04:07(11-17- 2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: benjamin.rogers@enron.com