VA Linux Expects Wider Losses For Quarter

VA Linux Systems Inc., a developer of software and products for the Linux computer operating system, said its fiscal first-quarter results would fall short of expectations because of disappointing sales to Internet start-up companies. The gloomy forecast sent VA Linux shares tumbling 42%. Fremont, Calif.-based VA Linux said it now anticipates a loss of 14 cents to 16 cents a share for the first quarter, excluding noncash items, primarily because of disappointing revenue and increased spending based on more optimistic revenue expectations. Wall Street analysts had been expecting a loss of 9 cents, according to First Call/Thomson Financial. The company said it would report first-quarter results Nov. 16. VA Linux shares dropped $12.63 to close at $17.38 on Nasdaq. The Linux operating system is a challenger to Microsoft Corp.’s Windows program. Another distributor of Linux, Red Hat Inc., saw its shares fall $1.63, or 9%, to close at $15.94 on Nasdaq.