Wind River crawling to black

Reed Stevenson

SEATTLE: Wind River Systems Inc., which makes software for industrial robots and consumer devices, reported a 9 percent rise in revenue while losses narrowed in its fiscal first-quarter as a bullish outlook sparked a share rally. The Alameda, California-based company said profits in the current quarter would beat analysts' forecasts.

Wind River reported a net loss of $3.8 million for its fiscal first-quarter ended April 30, compared with a loss of $10.8 million a year earlier.

Wind River chief executive Ken Klein, who was appointed last November, said that an improving economy and demand for electronic devices, as well as big customer wins, helped the company's sales in its latest quarter.

"It was helpful to have a stronger economy as people build more devices. They really need solutions from Wind River, and we're obviously able to take advantage of that bump in demand," Klein said.

Excluding amortization, restructuring and other costs, Wind River reported a loss of $1.9 million compared with a loss of $9.3 million a year earlier.

Revenue rose to $52.8 million from $48.5 million, above analysts average forecasts as well as the company's own outlook.

Wind River said that it had won a broad licensing contract with Samsung Electronics Co. Ltd. as well as a key contract with Smiths Aerospace for building the core computer system for the 7E7 Dreamliner, the new cost-efficient airplane being built by Boeing Co.

A recent deal with Linux distributor Red Hat was also helping profitability, Klein said.

Wind River is projecting a loss of between 3 cents and 5 cents per share profit on revenue of $53 million to $55 million in the fiscal second quarter.

Excluding charges, Wind River forecast a loss of 1 cent to 3 cents, above analysts' average outlook for a loss of 5 cents per share.

Wind River said that income from the recent Linux deal with Red Hat would begin to impact earnings toward the end of the company's current fiscal year.

Wind River said earlier this year that it would develop software with Red Hat for Linux-based devices such as cell phones and set-top boxes.

The move comes as Linux, the freely available operating systems that has become a popular choice for networked computer servers, becomes popular in the device software market, where software is built in-house or purchased from companies such as Wind River and Microsoft Corp.

©Reuters