Another hectic IT week

Several very large mergers/acquisitions, including Exodus Communications` take-over of Global Crossing`s GlobalCenter unit to create one of the world`s largest Web-hosting companies, Corning`s acquisition of Pirelli`s fibre optic unit and the global alliance pact of AOL and NTT DoCoMo, dominated the international world of IT and telecommunications last week.

The US Supreme Court declined to review the Microsoft/Department of Justice case and referred it back to the appeals court, thus prolonging the situation and a decision for many months, if not years.

Paul Booth, MD, Global Research Partners

At home, the plethora of local results stole much of the local headline space.

• we saw good maiden year-end results from Prada Technologies (however, below prospectus forecast figures);
• satisfactory full-year (16 months) from TopTech (revenue well up but income lower than previous year);
• disappointing full-year results from Mustek (revenue up but income well down) and Pinnacle (both revenue and income down);
• a full-year (16 months) loss from I-Fusion (although revenue up - now part of Bidvest Group);
• good interims from Aries (but IT division stagnant);
• satisfactory half-year numbers from ShawCell (both revenue and income static);
• disappointing interims from Fintech (revenue and income down);
• very poor interim figures from Integrated Technology (just in the black);
• a half-year loss from Conlog (also revenue well down), Cyberhost (but revenue well up), iTouch (the first set of results since going public on the LSE) and Y3K (revenue significantly down); and
• a profit warning (lower than prospectus figures) from Stella Vista.

[Local]

Other local news included:

• the announcement from Planit that it is integrating much of defunct Insys Business Solutions into the company, including Brian Packham, the ex-MD of Insys, as executive director;
• the news of job losses at Vodacom;
• the appointment of Brent Hamilton as the new MD of Dell SA; and
• the news that Idion is seeking to increase its offshore stake.

Additionally, there are strong rumours circulating that AST is bidding for ERP.com.

• the US Supreme Court declined to review the Microsoft/Department of Justice case and referred it back to the appeals court, thus prolonging the situation and a decision for many months, if not years;
• Paul Allen, one of the founders of Microsoft, assumes a new role as senior strategy advisor to top Microsoft executives, but has stepped down from the board;
• FSPNetwork has changed its name to Combio, and Symix is proposing to change its name to Frontstep;
• Corel is reorganising;
• Maxtor may be acquired by a major computer data-storage company; and
• NTT has announced that it intends to issue 300 000 shares worth about $2.96 billion.

[International]

Other international news included:

• the appointments of Bruce Clafin as CEO of 3Com, Randall Curran as CEO of ICG Comms and Glen Estell as president and COO of Metricom;
• the resignations of Eric Benhamou, CEO of 3Com, Todd Oseth, president and director of LanguageWare.net and Carlos Vizcarra, founder and CEO of CompuComp; and
• the announcement of job losses by WebMD.

We saw excellent figures from Geo Interactive Media (back in the black), Palm, TPV Technology and Tibco Software (back in the black).

Losses came from 3Com, ARI Network Services, Bakbone Software, Bitwise, Cabletron, CellStar, Corel, Cox Technologies, DTS, Freeserve, Franklin Telecomms, IFX, Intraware, LibertySurf SA, MAX Internet Comms, Pacific Century CyberWorks, Research In Motion and Saba Software.

Good numbers were recorded by Ault, Infinite Graphics, IS Solutions and Micron Electronics.

Mediocre returns came from American Nortel Comms and Media 100 (but back in the black); while very poor results came from Unique Broadband Systems.

Other financial news included profit warnings from Apple, Eastman Kodak, Exchange Applications, Lernout & Haupsie, Lexmark, Metabox AG, Micrografx, Microtest, Mitek, Net Perceptions, Paradyne Networks, Ramp Networks, Sitel and Verilink.

There was also a share split announcement from DST Systems; excellent IPOs from AvantGo (mobile infrastructure software), CoSine Comms (Internet equipment); and satisfactory IPOs from AtRoad (mobile resources), Elastic Networks (comms) and Simple Technology (hardware products). Additionally, Intershop Comms AG listed successfully on the Nasdaq.

Locally

ASAS (+25%)
C-Tech (-40%)
Crux (+29.5%)
Cyberhost (+50%)
ERP.com (+34.5%)
Pinnacle (-26.7%)
PTH (-22.2%)
Sekunjalo (-27.5%)
Streamworks (+31%)
Y2KTec (-22.2%)

Internationally

3Com (+31.7%)
Apple (-50.7%)
Aspeon (-33.6%)
Clarus (-35.4%)
ePlus (+31.7%)
Exchange Applications (-75%)
Internet America (-34.6%)
Larscom (+40.7%)
Sitel (-38.9%)

Tomorrow sees the opening of the first SA Comdex exhibition and conference, and this week sees yet more local results, including interims from Altech and Datacentrix, with the overseas quarterly results starting to flow from mid-October.

Finally, I will be away overseas on business during the next week so the next issue of this column will cover two weeks and will be published on Monday, 16 October.