Red Hat's Back In The BlackRed Hat's Back In The Black

Despite questions about the sanctity of the Linux operating system, leading Linux provider Red Hat Inc. reported Tuesday that it has seesawed back into the black. For its first quarter, ended May 31, Red Hat reported a profit of $1.5 million, or 1 cent per share, on revenue of $27.2 million. That's a vast improvement over the year-ago quarter, when the company reported a loss of $4.6 million, or 3 cents per share, on revenue of $19.5 million.

The company had reported is first-ever profit for its third quarter of 2003, ended Nov. 30, 2002, only to end fiscal 2003 with a $56,000 fourth-quarter loss.

Red Hat rebounded in the first quarter with subscription revenue of $17.4 million, up from $10.7 million a year ago. Quarterly services revenue was $9.8 million, up from $8.9 million a year ago. For its second quarter, Red Hat projects revenue will be as high as $28.5 million.

During the first quarter, Red Hat, Dell Computer, and Oracle moved the 13-million customer database of Orange SA, a U.K. telecommunications provider, from an Oracle8i database on a RISC-based Sun Microsystems Solaris platform to one comprised of four Dell PowerEdge 6650 servers running an Oracle9i database with Real Application Clusters and Red Hat Linux. Red Hat also signed a global partnership with Fujitsu Ltd. to market Red Hat Enterprise Linux for customers running key applications on Fujitsu's Intel Xeon and Itanium-based servers.

The quarter was also marked by SCO Group's March 6 lawsuit against IBM, alleging that IBM violated its licensing agreement with SCO by feeding Unix source code to the Linux community. Red Hat general counsel Mark Webbink said during a conference call Tuesday that Red Hat is not a party to any lawsuit regarding any alleged misappropriation of Unix source code into Linux.

"We take intellectual-property issues very seriously," Webbink said, adding that Red Hat reviews the open-source code it uses to determine its origins. "Red Hat is confident that it has the right to continue to distribute its open-source operating system," he said. "We remain optimistic about the future of open source."