Last week: LCR ruling, empowerment deal

The acquisition of Transiciel by Cap Gemini Ernst & Young and Intelsat`s successful bid for Loral`s assets dominated the international world of IT and telecommunications last week.

Look out for the possible merger of the server businesses of Fujitsu and Sun Microsystems.

Paul Booth, MD, Global Research Partners

At home, the possible empowerment deal between Comparex and Business Connexion Solutions, the bid for Aplitec, the ruling on the least-cost routing issue and the problems re Vodacom`s entry into Nigeria stole much of the local ICT headline space.

* the suspension MGX`s shares;

* the proposed deal between Comparex and Business Connexion Solutions to create a new IT empowerment giant;

* the creation of a research team for the ICT empowerment working group;

* the appointment of Mathews Phosa as non-executive chairman of EOH;

* the ongoing legal battle re Vodacom`s possible entry into Nigeria; and

* the naming of Dali Mpofu of Altron as the IT Personality of the Year, John Lee of Sun International as the CSSA private sector CIO of the year and Hassen Ebrahim of the Department of Justice as the CSSA public sector CIO of the year.

New local distributorships included that of Axiz for 4Cos and Phoenix Software for Bowline.

* Net Perceptions, a supplier of predictive analytic software, is to be wound up after it failed to find a buyer for its business; and

* Groupe Bull expects to complete its re-financing deal by year-end.

* Additionally, look out for the possible merger of the server businesses of Fujitsu and Sun Microsystems.

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

Other international news included:

* the appointments of Eytan Bar as president and CEO of MTS, Cedric Loiret-Bernal as president and CEO of NanoInk, Greg Oslan as president and CEO of Narus, Philippe Sanchez as president and CEO of PhotoWorks and Tim Walsh as president of THQ Wireless; and

* job loss announcements from Arc International and Sony.

We saw excellent* figures from Ask Jeeves (back in the black), August Technologies (back in the black), Cognizant Technology Solutions, Dot Hill Systems (back in the black), EPIQ, Exult (back in the black), Hynix Semiconductor (back in the black), j2 Global, Overland Storage, SafeNet, SOHU.COM, TTM Technologies (back in the black) and UTStarcom.

Very good* numbers were posted by C-COR (back in the black), CACI, Click Commerce (back in the black), Edgewater Technology (back in the black), Forrester Research (back in the black), Foundry Networks, Nam Tai Electronics, RF Micro Devices, Symantec, Titan and West.

Good figures* were recorded by 3M, ACS, Actel, Affymetrix, Aladdin Knowledge Systems (back in the black), Amazon.com (back in the black), Autonomy, AVX (back in the black), Barra, Business Objects, Cass Information Systems, Checkpoint Systems, Cirrus Logic (back in the black), Citrix Systems, CyberGuard, Digital Insight, Digital River, Electronic Arts, Epicor (back in the black), Exponent, Fiserv, Getty Images, GRIC Comms, GSI Lumonics, Harris, IDC, Image Sensing Systems, Inet Technologies, Intersil, InterTAN, JDA Software, Komag (back in the black), L-3 Comms, LANDesk Software, Lexmark, LG Electronics, Maxtor (back in the black), MIND CTI, Mobius Management Systems, Moldflow, Navarre, NEC Electronics, Netsmart, NVE, Online Resources, Planar (back in the black), Power Integrations, Rainbow Technologies, Raindance (back in the black), Samsung SDI, Scientific-Atlanta, Shenandoah Telecomms, SoundView Technology (back in the black), SpectraLink, STET Hellas Synaptics, Telecomms, SunGard, Switchboard, Technitrol, Telecommunication Systems (back in the black), Teledyne Technologies, Tessco, Texas Instruments, Tietoenator, Trend Micro, Vasco (back in the black) and Veritas Software.

Satisfactory* figures were reported by Advanced Fiber Comms, Alltel, Altera, AMS, Ariba (back in the black), AT&T, AT&T Wireless (back in the black), BellSouth, Benchmark Electronics, Castelle, Concurrent Computer, Corning (back in the black), CorVel, Covansys, CT Comms (back in the black), CTS (back in the black), Dassault Systemes, Datastream Systems, Diebold, Dow Corning, DSP Group, DST Systems, EarthLink (back in the black), EFI, Fargo Electronics, Global Imaging, Harte Hanks, Hypercom (back in the black), Hyperion, II-IV, Information Holdings (back in the black), Instinet (back in the black), Integrated Circuit Systems, Keane, Logitech, Macromedia (back in the black), Marconi, Micrel (back in the black), Microsoft, Nashua, Network Associates, New Horizons (back in the black), PC Connection, Pervasive Software, Presstek, ProQuest, RadVision, Rimage, Sage Group, SAP SI, Sapient (back in the black), ScanSource, Seagate Technology, Storage Technologies, Synplicity (back in the black), Time Warner, Viacom, WebSense, Westell Technologies, Xerox, Xicor (back in the black) and Zebra Technologies.

Mediocre* returns came from Acxiom, ARM Holdings, AsiaInfo, Avaya, Belden, Black Box, Cabot Electronics, Carrier Access, CCC Information Services Group, CDI (back in the black), CDW, Check Point Software, CheckFree, Choice Point, Cobra Electronics, Computer Programs & Systems, Concord EFS, Consolidated Graphics, Convergys, Digimarc (but back in the black), Documentum, Eastman Kodak, Extreme Networks (but back in the black), FEI Company, Groupe Bull (but back in the black), i2 Technologies, Imation, InfoNow (but back in the black), Intelsat, Inter-Tel, Internet Security Systems, Intrado, InVision Technologies, KLA-Tencor, Lucent Technologies, Nassda, NCR, Neoforma, Nortech, Nortel Networks, Open text, Optibase (but back in the black), PDSi, PEC Solutions, Pegasystems, Pitney Bowes, Quest Software, SBC Comms, Snap-on, Sony, Tekelec, THQ, Trident Microsystems (but back in the black), Verisity, Viad and Western Digital.

Very poor results* were posted by Centillium Comms (but back in the black), Digital Impact, M-Systems (although back in the black), MSC.Software (but back in the black), Robocom, Shaw Comms (but back in the black) and Sypris.

Losses* came from Adept Technology, Advent Software, Alliance Fiber Optic Products, Anadigics, Analysts International, Applied Micro Circuits, Applix, Arc International, Arris, Artesyn, Ascential Software, ASM International, ATG, ATMI, Audio Codes, Avici Systems, Avistar Comms, AXT, BackWeb Technologies, BindView, Blue Martini Software, Borland, BroadVision, BSQUARE, Celestica, Chartered Semiconductor, Ciprico, Click2learn, Cohu, Colt Telecom, Computer Access Technology, Computer Associates, Compuware, CoSine Comms, Covad Comms, Cymer, Dialog Semiconductor, DigitalThink, Docent, DuPont Photomasks, E.piphany, Eclipsys, Ementor ASA, eMerge Interactive, Enterasys Networks, EXE Technologies, Extended Systems, First Consulting Group, Flextronics, FSI International, Gateway, HEI, Helix Technology, Hifn, Hummingbird, Ibis Technology, ICT Group, IDT, iGate, iManage, Information Resources, Infowave, Interactive Intelligence, inTEST, Intevac, JDS Uniphase, JNI, Kana Software, Kemet, Latitude, Lattice Semiconductor, LCC International, Level 3 Comms, Lightbridge, LSI Logic, Luminex, MatrixOne, Mattson Technology, McLeodUSA, Mentor Graphics, Mercury Interactive, Metalink, Metro One Telecomms, Micro Component Technology, Micro Linear, MicroHelix, Mobility Electronics, MRV Comms, Nanophase Technologies, Nera ASA, Net Perceptions, Net2phone, Nuance, Omtool, Oplink, PDF Solutions, Peak International, PeopleSoft, Pericom Semiconductor, Phoenix Technologies, Pinnacor, Pivotal, Proxim, PTC, Quantum, QuickLogic, Quovadx, Radcom, RadView Software, Ramtron International, Retek, RiT Technologies, Roxio, Sanmina-SCI, SeeBeyond, Segue Software, Selectica, Sento, SGI, Sierra Wireless, Silicom, Sirenza Microdevices, Smith Micro, Socket Comms, SonicWALL, Southwall Technologies, Spectrum, Signal Processing, Somera, Sprint, SST, Stellent, STMicroelectronics, Stratex Networks, Sunrise Telecom, Terayon, Third Wave Technologies, Three-Five Systems, TriQuint Semiconductor, Tumbleweed Comms, Turnstone Systems, Unova, Vastera, VeriSign, Vicor, Vignette, Vitesse Semiconductor, Vixel, Voxware, WatchGuard, Western Wireless, Witness Systems, WJ Comms, ZiLOG and Zoran.

Other financial news included an analyst upgrade for SeeBeyond Technologies; analyst downgrades for Celestica, Convergys, Identix, Macromedia and MSC.Software; positive results/profit warnings from Autonomy, Intec Telecom Systems and Lexmark; negative results/profit warnings (often veiled) from ASM International, AT&T, Celestica, Chartered Semiconductor, Colt Telecom, Concurrent Technologies, Convergys, Computer Associates, Lattice Semiconductor, LSI Logic, Sierra Wireless, Smith Micro, Sony and Toshiba; share split announcements from Shenandoah Telecomms and Symantec; and a possible IPO this week from chip packaging and design firm Tessera. Additionally, X10 Wireless Technology has filed for Chapter 11 protection.

Locally

AST (+30%)
Beget (-20%)
Bryant (+100%)
Cycad (+50%)
Edutech (+16.7%)
Global Technology (-33.3%)
I-Solutions (16.7%)
Idion (-17.1%)
Labat Africa (+16.7%)
Trematon (+30.4%)
Synergy (+16.7%)

Internationally

Com21 (-33.3%)
Computer Software Group (+777.7%)
Intec (+53.5%)
j2 Global Comms (-30%)
Leap Wireless International (-68.9%)
Macromedia (-32.2%)
Orckit Comms (+38.1%)
Pegasus Comms (+44%)
RadView Software (-30.3%)
Tarantella (-32.9%)

In terms of indices, Nasdaq was down 2.4% and the JSE down 3.6% for the week.

It was inevitable after being associated for so long in the exploitation of Sun Microsystems` Sparc technology that Fujitsu and its partner Siemens, together with Sun should now converge their 'high-end` Sparc-based server product lines. The two companies have worked closely since 1988, when Fujitsu started marketing Sun`s Solaris operating system in Japan. Although I don`t believe Fujitsu can afford to acquire Sun Microsystems (market capital is +/-$11.2 billion), a deal of this nature shouldn`t be ruled out further down the line, especially if the losses at Sun continue to mount.

* 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 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.