This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

SCO Group Widens Loss, Legal Action

Updated from 12:42 p.m. EST

SCO Group (SCOX) dropped a widely expected second bomb in its fight against Linux open-source software, suing Linux users AutoZone (AZO - Get Report) and DaimlerChrysler (DCS). The tiny Lindon, Utah-based company also announced Wednesday a wider first-quarter loss vs. a year ago on declining revenue.

Shares of SCO closed down $1.83, or 13.6%, to $11.59, reversing a 9.4% climb Tuesday. Stung by SCO's lawsuit and disappointing same-store sales , AutoZone shares lost $4.76, or 5.4%, to $83.64, while DaimlerChrysler shed 16 cents, or 0.4%, to $44.75.

Under generally accepted accounting principles, SCO reported a net loss of $2.3 million, or 16 cents a share, in the first quarter. That compared to a net loss of $724,000, or 6 cents a share, in the same period a year earlier.

Revenue declined to $11.4 million from $13.5 million a year earlier.

Thomson First Call's lone SCO analyst forecast the company would lose 22 cents a share on $13.2 million in revenue in the first quarter.

In the second quarter, SCO said it expects revenue to range from $10 million to $14 million. The company did not give earnings guidance.

SCO filed suit against AutoZone Tuesday in U.S. District Court in Nevada, charging that the company violated SCO's Unix copyrights through its use of Linux, according to a press release. In a conference call Wednesday morning, CEO Darl McBride said SCO is in the process of filing a similar suit against DaimlerChrysler in Michigan.

But he further explained that SCO does not, in fact, know whether Daimler's use of Linux is violating its Unix software agreement with SCO. Rather, Daimler was among a group of Unix users who failed to respond to SCO's request asking them to certify they are in compliance with their software agreement. Of the more than 3,000 Unix licensees, more than half failed to respond to such requests from SCO mailed in December, McBride said.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
AZO $679.25 0.00%
IBM $173.67 0.00%
MSFT $48.66 0.00%
AAPL $128.95 0.00%
FB $78.99 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs