IT industry awash in quarterly losses

The $7.8 billion acquisition of Alteon WebSystems by Nortel Networks and the large number of companies showing losses in their latest quarterly results dominated the international world of IT and telecommunications last week.

A senior Gartner speaker condemned Telkom`s strategy as a disaster, and the main inhibitor to development and growth in this country.

Paul Booth, columnist, ITWeb

At home, the continued delay over the third cellular licence and the unbundling of Siltek from Kunene Technology was major news during a relatively quiet week.

• we saw good full-year numbers from Core Holdings;
• satisfactory full-year results from Interconnective Solutions (back in the black although second six months very poor);
• full-year figures for NetActive show a loss for its continuing operations; and
• the announcement that following Kunene Technology`s unbundling from Siltek, it will transfer to the electronics and electrical sector of the JSE.
• This week sees iTouch listing on the London Stock Exchange, but at a reduced price than originally intended.
• There was also the break-up of the relationship between Mustek and Compaq.

[Local]

Local acquisitions, mergers, investments etc (see attachment).
Local Cautionary Notices (see attachment).
Local Listing calendar (see attachment).
Local Result Summaries (see attachment).
Local Major Event Summary (see attachment).

• Finland-based Sonera, a telecoms company, put itself up for sale with a price tag of a minimum of $35 billion; and
• the proposed Nortel Networks/Corning acquisition, worth some $100 billion, has been called off.
• Rumours abound re a possible tie-up between America Online and Japan`s NTT DoCoMo, the world`s largest cellular operator.

International acquisitions, mergers, joint ventures etc (see attachment).

[International]

Other international news included:

• the appointments of Cesar Alierta as CEO of Telefonica, Joseph Galli as CEO of VerticalNet, David Grimes as CEO of Sykes Enterprises, Kevin Ryan as CEO of DoubleClick and Andrew Stern as CEO of USinternetworking;
• the resignations of Hal Covert, CFO at Red Hat, Kim Polese, founder and CEO at Marimba, and Juan Villalonga, CEO at Telefonica; and
• job losses at First Data.

We saw excellent figures from ACT Manufacturing, ASM International NV, Brooks Automation, CDW Computer Centers, Cree, Cysive (back in the black), Diamond Technology Partners, Exchange Applications, Forrester Research, Infineon, Integrated Silicon Solution, KLA Tencor, Lam Research, Legend Holdings, M-Wave (back in the black), Pac-West Telecomm, Pericom Semiconductor, Pinnacle Data Systems, Razorfish, Varian Semiconductor (back in the black) and VisualSoft Technologies.

Losses came from 3Dlabs, Accelerated Networks, Active Software, Active Voice Comms, ACT Networks, Aether Systems, Akamai Technologies, Allegiance Telecom, Amazon.com, American Superconductor, Apropos Technology, AT&T Canada, Auspex, Avanex, BackWeb Technologies, Bell Canada International, Bluestone Software, Breakaway Solutions, Broadwing, c-Cube, Cambridge Technology Partners, CapRock Comms, Chordiant Software, Clarus, Comdial, CompleTel Europe NV, CompuDyne, Continuous Software, Covad Comms, CTC Comms Group, Cybercash, Cylink, Data I/O, Datakey, Datastream Systems, Datron Systems, Digital Insight, Digital River, DSL.net, EAI, EarthLink, Ecsoft Group, eMerge Interactive, Epicor, eSoft, Evans & Sutherland, Exigent, F5 Networks (back in the black), Flextronics, FreeMarkets, Geoworks, Globix, GoTo.com, GRIC Comms, Hybrid Networks, i3Mobile, Infinium, InfoSpace, Intergraph, InterNAP Network Services, InterTrust Technologies, IXTC, JDS Uniphase, Kana Comms, Legato Systems, Level 8 Systems, Madge Networks, Mapics, MatrixOne, Micro Linear, MicroStrategy, MicroTouch, Microware, Minolta-QMS, Navidec, Neon Systems, Net2000 Comms, NetGenesis, NetObjects, NetPerceptions, Network Commerce, Nextlink, Nextel Partners, Nortel Networks, Novadigm, Onyx Software, Open Market, P-Com, Persistence Software, Pinnacle Systems, Precise Software, Primedia, PSDI, Quest Software, Ramp Networks, RDM, Read-Rite, Sanchez Computer Associates, Sapiens International, SCO, Segue Software, SGI, SilverStream Software, Smith Micro, Software Technologies, Sony, SRS Labs, StorageNetworks, Superconductor technologies, Switchboard, Symix, Syntel, Telaxis Comms, Telular, Telxon, Triton Network Systems, UBICS, US Interactive, USA Networks, USinternetworking, UTG Comms International, V3 Semiconductor, Vasco Data Security, VeriSign, VerticalNet, Vignette, Virata, Vixel, VocalTec Comms, Walker Interactive Systems, WatchGuard Technologies, Wavecom, WAVO, Williams Comms, Witness Systems and World Online.

Good numbers were recorded by Actel, Acxiom, Alcatel, Anixter, AppNet, Arrow Electronics, AT&T Wireless, Avant, Axent Technologies (back in the black), California Micro Devices (back in the black), Clarent (back in the black - just), Coherent, CSG Systems International, CTS, Datum, Embratel, Fairchild Semiconductor (back in the black), Flexible Solutions, Fortel (back in the black - just), L3 Comms, Linear Technology, Logitech, LSI Logic, Marimba (back in the black), Maxtor (back in the black), Microsemi (back in the black), Misys, Nokia, PCTEL, Radyne Comstream, Remedy, Scientific-Atlanta, Siliconix, Software AG, Sonera, Sunrise Telecom, Systar, Telemetrix, Texas Instruments, Unigraphics Solutions, Verilink, Vishay Intertechnology, West TeleServices, Wipro and WorldCom.

Satisfactory numbers came from 3M, Allen Telecom, AT&T, Capita Group, Compaq (back in the black), CompuCom, Comshare, Cryptologic, Diebold, Dow Corning, EDS, Glenayre Technologies (back in the black), Global Imaging Systems, Harland, Harris (back in the black), Image Sensing Systems, Imation, Network Six (back in the black), Quantum HDD Group (back in the black), Sitel, Storage USA, Telekomunikacja Polska SA, Trident Microsystems (back in the black), Ultimate Software and Versant.

Mediocre returns were reported by American Power Conversion, BMC Software, British Telecom, Ciber, Clear Channel Comms, Cognitronics, Comdisco, Consolidated Graphics, Cox Comms, CT Comms, Inprise/Borland, Keane, Mercator Software, MSC Software, Printrak International, Quantum DSSG, The IT Group, Western Digital (but back in the black) and Xerox.

Very poor results came from Datawatch (but back in the black), Evolving Systems (but back in the black), OTG Software, Radiant Systems and Tower Semiconductor (but back in the black).

Other financial news included profit warnings from Baltimore Technologies, BMC Software, Circuit City Stores, Nokia, PSC and Xeta Technologies.

There were also share split announcements from Flextronics and RF Micro; poor IPOs from Interland (Web-hosting), Evoke Comms (Web services) and ValiCert (secure Internet transactions); and very successful IPOs from Avici Systems (networking equipment), Blue Martini (CRM software), Corvis (optical networking components), Lexant (telecoms) and WebEx (multimedia comms services).

Locally

Cyberhost (+40%)
ERP (-25%)
I-Solutions (+26.7%)
I-Tech (+75%)
Micrologix (-37.5%)
MMW (+81.8%)
NetActive (+38.1%)
ValueCom (+81.8%)
Y3K (+23.1%)

Internationally

3Com (-81%)
American Superconductor (-36.3%)
APAC Customer Services (-30.5%)
Broadbase Software (-31.7%)
Dataram (-39.2%)
Integrated Device Technology (-32.6%)
Maxtor (-41.9%)
NetObjects (-50.5%)
PSC (-56.6%)
Quantum HDD (-30.7%)
Remedy (-50.6%)
Ursus Telecom (-45.9%)
Workflow Management (-32.9%)

Last week I was fortunate enough to attend the first-ever Gartner convention in South Africa.

One of the highlights for me was a senior Gartner speaker, who condemned Telkom`s strategy as a disaster, and the main inhibitor to development and growth in this country, (at this point the audience erupted with a great round of applause).

He added that the situation wouldn`t necessarily improve with the introduction of a second (regulated) fixed-line operator. Unless the situation is addressed with some great urgency, the current regulatory situation would make SA fall significantly behind developments in the "western" world - a very difficult situation from which to recover.