Financial results: From mediocre to excellent

The row between the European Commission and Bull dominated the international world of IT and telecommunications during a quiet week.

In an almost unnoticed event, Bill Gates and a senior IBM executive said they had agreed on industry standards in the area of Web services.

Paul Booth, MD, Global Research Partners

At home, the financial results from a number of companies as well as some positive and negative profit warnings stole much of the local ICT headline space.

* we saw good 15-month numbers from Connection Group (revised year-end date);

* mediocre annual results from Pinnacle Technology (revenue up but net profit well down);

* full-year losses from Aqua Online (revenue also well down), Bryant Technology (revenue also down), DNA (revenue also slightly down) and Integrear (revenue also down);

* excellent interim numbers from Beget Holdings (revenue and profit both significantly up);

* mediocre half-year figures from Infowave (revenue just up but profit down);

* an interim loss from Bytes Technology Group (revenue also down);

* the suspension of Softline`s shares as of today;

* negative profit warnings from Bryant Technology and BTG; and

* positive results/earnings warnings from the MTN Group and Synergy Holdings.

Other local news included:

* a share re-purchase announcement from CCN;

* the resignations of Toni Fourie, CEO of Connection Group Holdings, and Derek Hughes, MD of Software Futures; and

* the appointments of Arthur Brown as transition MD of Software Futures and Grattan Kirk as CEO of Connection Group Holdings.

New local distributorships included that of 4D Digital Security for ESET Software, Comztek for ADIC, EBIS for Acer in Africa (except SA) and Esquire Technologies for Xitel multimedia products.

* we saw a reshuffle of senior executives at Nokia;

* the name changes of Innodata to Innodata Isogen and STS Systems to NSB Retail Solutions;

* the suspension of the shares of UK-listed PC Medics; and

* the Belgian government will allow Belgacom, its telecomms operator, to go public next year.

Additionally, look out for possible European acquisitions by PeopleSoft, with Software AG being one of the names being touted, and the outcome of the fight between the French government and the European Commission over the non-repayment of the former`s loan to Bull.

Other international news included:

* the appointments of William Esrey as chairman of Japan Telecom, Thomas Jones as president and CEO of Velosel, Ssang Soo Kim as CEO of LG Electronics, Ronald Nutt as president and CEO of CTI Molecular, Maureen O`Connell as president and COO of Gartner, Richard Roll as CEO of FieldCentrix, Dave Shellock as CEO of PC Medics and Larry Turner as CEO of Francotyp-Postalia;

* the resignations of Magnus Braxell as CEO of Telspec, Terry Douglass as president and CEO of CTI Molecular (continues as chairman), John Koo as chairman and CEO of LG Electronics, Robert Lerwill as deputy CEO and CFO of Cable & Wireless, and Robin Parker as CEO of PC Medics;

* the retirement of Peter Espenhahn as chairman of Telspec; and

* job loss announcements from Celeritek, IBM, Korea Telecom, PeopleSoft and Tellabs.

We saw good figures* recorded by CSI, InterVoice (back in the black) and SMTEK International (back in the black); and satisfactory* ones by ATI Technologies (back in the black).

Mediocre* returns came from California Amplifier, Entegris, Frisco Bay Industries, Prosoft Training, Sopra Group and TSR.

Losses* were posted by CDT, CMGI, DPAC Technologies, Eltek, EXFO, GTC Telecom, Jaco Electronics, NetWolves, Novo Networks, Nu Horizons Electronics and Telspec.

Other financial news included analyst upgrades for Adobe Systems, AMD, ASML, Extreme Networks, Flextronics, Jabil Circuit and PDF Solutions; analyst downgrades for Business Objects and NetIQ; share buy-back announcements from ePlus and InterDigital; and positive results/profit warnings from Adtran, Aladdin Knowledge Systems, Cirrus Logic, Digi International, Metrologic, Reliance Infocomm, Sharp, Stellent, Systems & Computer Technology and UTStarcom.

There were negative results/profit warnings (often veiled) from Art Technology Group, Computer Horizons, CTI Molecular, Enterasys Networks, Entrust, Intuit, MatrixOne, Misys, mmO2, NetIQ, Nintendo, Perceptron, Siebel Systems, Sun Microsystems, Synstar, Sypris Solutions, Telspec and Visual Networks; a share split announcement from Datec; an IPO filing from software company Kintera; and planned IPOs by AlphaSmart on Nasdaq and TCL in China.

Locally

AdvTech (+15.4%)
Aqua Online (+12.5%)
AST (+30%)
DNA (-50%)
Global Technology (-20%)
IST (+13.8%)
Jasco (-13%)
MTN Group (+18.3%)
Pinnacle (-23.1%)
Trematon (+31.3%)

Internationally

Digi International (+27%)
Glenayre Technologies (+34.9%)
Iomega (-39.2%)
IQE (+26.3%)
Leap Wireless International (+33.3%)
NCD (-30%)
NetScout (+26.1%)
On2 Technologies (-24.7%)
PCDI (+25%)
Redback Networks (-28.5%)

In terms of indices, the Nasdaq was up 4.9% and the JSE up 0.01% for the week.

In an almost unnoticed event, Bill Gates and a senior IBM executive said they had agreed on industry standards in the area of Web services, the sort of software many industry authorities believe will usher in a new era of secure but simple interconnections among computer systems from different companies.

They indicated that the companies had developed ways to let organisations do business with each other over the Internet without having to write new software programs for each new customer or supplier.

They said they would allow other companies to use these standards royalty-free in the hope that it would boost customers` willingness to buy more computer equipment and software. There had been reluctance on the part of users to embrace Web services, as they had not been sure software vendors would implement the necessary changes that would enable this scenario to occur.

At this event, software programmers from IBM and Microsoft demonstrated several key capabilities for the new standards. They said that identification standards using passwords would allow an authorised stock-room clerk at one company to sign on to the company`s network and order supplies from any vendor with which that company had a purchasing agreement, all with a single sign-on. The new standards also permit messages, such as orders, to be sent reliably so that the sender receives confirmation regardless of what kind of computer system the order receiver has.

It was hoped that other software vendors such as Oracle and BEA Systems would work with them to finalise the standards.

* NB

'Guidelines` for the categorisation of results is as follows and is 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 is in excess of 50%.

* Very Good: Both revenue and net income growth is in excess of 25%

* Good: Both revenue and net income growth is 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.