A week of sell-offs, telecom deals

Deutsche Telekom`s $2.5 billion mobile network deal in the US and the expected Softbank/Japan Telecom deal dominated the international world of IT and telecommunications last week.

At home, Datatec`s year-end results and the sell-offs by Iocore stole much of the local ICT headline space.

* We saw mediocre full-year numbers from CCN (revenue well up but profit well down);

* A full year loss by Datatec (although revenue up);

* Mediocre interim figures from Vesta Technology Holdings (revenue and profit both down);

* An interim loss from Stella Vista (revenue also significantly down); and

*Negative trading updates from Elexir Technology and Labat Africa.

Other local news included:

* The appointments of Thomas Dolan as president and CEO of Datatec`s Westcon Group, Dean Jordaan as GM of Mosaic Software Africa and Alain Michel as CEO of Atos Origin SA;

* Iocore sold off its SAP and Oracle divisions;

* Lindiwe Mkhize`s 9% investment in ExecuTrain; and

* The establishment of ADIC Africa, a joint venture between Sifikile Investment Holdings and ADIC.

New local distributorships included that of the Create!form suite of electronic form and document output management products by CenterField.

* We saw Vodafone`s proposed buy-out of the minority stakes of its Japanese units;

* The name changes of interNetwork to Q and TTR Technologies to Amedia Networks; and

* Bawag, Austria`s fourth-largest bank, sold off its 40% stake in MobilTel, Bulgaria`s biggest mobile group, in a transaction worth EUR400 million.

International strategic partnerships were announced between

Additionally, look out for Softbank`s $2.3 billion acquisition of Japan Telecom; the buyer for Verizon`s Canadian telephone directories business; and the outcome of the talks between DDI Pocket and Carlyle, the US private equity group, together with Kyocera re the purchase of the former for about $2.1 billion.

Other international news included:

* The appointments of Alan Aldworth as chairman of ProQuest, Dave Butler as CEO of TCI Solutions, Jack Heath as president of Arkwright and Gervais Pellissier as chairman and CEO of Bull; and

* The resignations of Colin Burnside as CEO of Diagonal and Zaki Rakib as CEO of Terayon Comms.

We saw excellent* figures from Applied Signal Technology, Blue Coat Systems (back in the black), Dycom Industries, Navarre, Opsware (back in the black), Timeline (back in the black) and VimpelCom; and very good* numbers from Catalyst Semiconductor and SemTech.

Good figures* were recorded by Ansoft, Daktronics, Detica Group, Ditech Comms (back in the black), netGuru (back in the black), Quality Systems, RM (back in the black), SeaChange International and Tech Data; and satisfactory* ones by Computer Associates (back in the black) and Novell (back in the black).

Mediocre* returns came from C&D Technologies, MKS, Nintendo and Per-Se Technologies; while very poor results* were reported by XETA Technologies (but back in the black).

Losses* came from 8x8, Aegis Comms Group, Agile Software, ASAT Holdings, AXT, Camtek, CNE, Convera, Crossroads Systems, DataMirror Group, eLinear, GigaMedia, Infogrames Entertainment, Kingston Comms, LanVision Systems, Network Installation, Peerless Systems, Plato Learning, Portal Software, Stratus Technologies, Tactex. TiVo, US Dataworks, VA Software, Vodafone Group, Voxware and Xplore Technologies.

The highest technology company in the UK`s Financial Times Global 500 was Microsoft at number two (down from one) followed by Intel at eight (up from 15).

Paul Booth, MD, Global Research Partner

Other financial news included analyst upgrades for JDA Software and Tech Data; analyst downgrades for Comverse Technologies, iPayment, ManTech International, Microchip Technology and Terayon Comms; private funding obtained for Cradle Technologies, Epiance, Inea, Itemfield and Tacit Networks; share buy-back announcements from HP, IXYS and Vodafone Group; positive results/profit warnings from Proview and Telstra; negative results/profit warnings (often veiled) from CellStar, Diagonal, Eidos, ManTech, RealNetworks and TTG Europe; share split announcements from Iron Mountain (3:2) and WebSky (10:1); and planned IPOs from ECM software vendor Hyland Software and Israeli technology company, PowerEsine. Additionally, RCN has filed for Chapter 11 protection as part of its restructuring process.

Locally

AST (-14.7%)
Beget (+50%)
CS Holdings (-15.2%)
Datatec (-11.2%)
Elexir (-66.7%)
Idion (-14.3%)
MGX (+14.3%)
Sethold (+16%)
Trematon (-9.5%)
Vesta (+100%)

Internationally

Arris (+31.7%)
Blue Coat Systems (-27.5%)
Bookham Technology (+27.7%)
Commerce One (+32.5%)
Finisar (+34.5%)
ITXC (+25.5%)
Jupitermedia (+25.9%)
Mitek (-29.8%)
Paxson Comms (+26.6%)
SEMX (-35.4%)

In terms of indices, Nasdaq was up 3.9% and the JSE up 1.5% for the week.

Last week saw the UK`s Financial Times Global 500 ranking, which is created by listing organisations from a market capitalisation viewpoint. The highest technology company was Microsoft at number two (down from one) followed by Intel at eight (up from 15).

Other top ranking ICT companies included Cisco at 11 (up from 24), Vodafone at 12, IBM at 14 and NTT DoCoMo at 25. New entrants to the list included Lucent Technologies at 301, Chunghwa Telecom (Taiwan) at 320 and NEC at 357. There were 10 other new names that also made the grade.

* NB

Guidelines for the categorisation of results are as follows and are always in comparison with the equivalent period for the previous year; pro forma numbers are ignored (the terminology may vary slightly from country to country).

Excellent: Both revenue and net income growth in excess of 50%.
Very good: Both revenue and net income growth in excess of 25%.
Good: Both revenue and net income growth in excess of 10%.
Satisfactory: Revenue is within 10% of previous year and net income is up.
Mediocre: Either revenue and/or net income is down.
Very poor: Net income is less than 1% of revenue.
Loss: A loss has been recorded.