VA Linux Systems Inc. Thursday met lowered Wall Street expectations with a first quarter pro forma net loss of $7 million, a loss of about 15 cents per diluted share, compared to a loss of $7.2 million, or 27 cents per share, for the same period last year.

Analysts had originally forecast a loss of nine cents per share but revised that estimate on a warning from the company.

The Fremont, Calif.-based company posted revenue of $56.1 million for the quarter, up 278 percent from the $14.8 million it posted in the same quarter a year ago.

"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," said Dr. Larry M. Augustin, president and chief executive officer of VA Linux Systems. "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."

Augustin said the higher-than-expected loss was driven by a quicker than anticipated falloff in business from venture-funded pure play dotcoms in the consumer segment. He added that the company is striving to increase its presence in the enterprise market.

VA Linux closed at $12 Thursday, down from its open of $12.18.