Losses, mediocre results abound

The cable deal involving AT&T and AOL Time Warner dominated the international world of IT and telecommunications last week.

Fortune magazine has announced its Fastest Growing Companies list, with Nvidia at number one.

Paul Booth, MD, Global Research Partners

At home, the handful of local results stole much of the local headline ICT space, during yet another very quiet week both at home and abroad.

• we saw a full-year loss from FrontRange (but revenues up slightly);
• mediocre full-year figures from MGX (revenue well up but net income well down);
• an interim loss from Advtech (revenue also down); and
• a profit warning from Dimension Data.

[Local]

Other local news included:

• the liquidation of Hicor;
• the Connection Group changed to the general retail sector of the JSE;
• the appointment of Bob Cagnazzi as CEO for Dimension Data in North America and David McWilliam as the new MD of Cognos SA;
• the announcement by MTN that it now has in excess of five million subscribers in Africa; and
• the revelation of yet another probe into insider trading allegations at Datacraft Asia.

• we saw the outcome of a major restructuring deal between AOL Time Warner and AT&T re the US cable market. One of the key outcomes is the establishment of a new company, Time Warner Cable (TWC), which is likely to have an initial public offering early next year. TWC will house all the cable assets from both companies, with its ownership between AOL and AT&T being 79% and 21% respectively.
• Furthermore, McAfee.com finally agreed to Network Associates` buy-out bid, after nearly six months of negotiation.

Additionally, look out for the possible acquisition of Vivendi`s stake in Vizzavi wireless Web portal by Vodafone; the possible sell-off by Deutsche Telekom of its US mobile arm, VoiceStream, which is also in talks with Cingular Wireless re a possible merger; the possible sell-off by KPN NV of its 15% stake in Hutchison 3G; and the possible acquisition of Commerce One, which will be seeking approval for a reverse share split in September, in order to shore-up its share price.

[International]

Other international news included:

• the appointments of Mark King as president of ACS, Walid Maghribi as CEO of Sipex, and Tom Sennhauser as president and CEO of Astute Networks;
• the retirement of Gary Burrell, co-CEO of Garmin; the death of Jan Stenbeck, founder of Tele2 and chairman of several technology companies; and
• job loss announcements from 724 Solutions, ADC Telecomms, Autodesk, Cingular Wireless, Framfab AB, i2 Technologies, Lucent Technologies, Riverstone Networks, SAP, Siemens and Time Warner Telecom.

We saw excellent figures from Innovative Software Technologies (back in the black) and OmniVision Technologies.

Good numbers were recorded by Concurrent Computer (back in the black) and OSI Systems; and satisfactory ones by Daktronics, IDI Global (back in the black), JD Edwards (back in the black), Matav (back in the black), Novell (back in the black), Systems Union Group and Tech Data.

Mediocre returns came from American Software, C&D Technologies, Delcam, Entrada Networks (back in the black), Global ManTech, Hutchison Whampoa, SCB Computer Technology, Swisscom and Transcomm (back in the black); while very poor results came from XETA Technologies.

Losses were posted by ACE*COMM, ADC Telecomms, Agilent Technologies, Amnis Systems, Ansoft, Arel Comms & Software, ASAT Holdings, Bottomline Technologies, Cambex, Ciena, Cognigen Networks, Comarco, Comdisco, Convera, Credence Systems, Crossroads Systems, Csii, Dataram, Descartes Systems Group, Deutsche Telekom, eB2B Commerce, Eiger Technology, Elbit Vision Systems, Ezenia, Financial Objects, FirePond, Framfab AB, I/OMagic, IEC Electronics, IP Applications, IQE, Key-Tronic, KPN NV, Logility, Marvell Technology Group, Neon Systems, Nera ASA, NetStore, o2wireless Solutions, Opsware, Orchestream, Portal Software, PPT Vision, QAD, SEMX, Sycamore Networks, Synopsys, The Harcourt Companies, TiVo, Tundra Semiconductor, Unify, VA Software, VIA NET.WORKS, Worldwide Wireless Comms, XeTel, Yell and Zygo.

Other financial news included share buy-back announcements from Liberty Satellite, OAO Technology, PCTEL and Tyler Technologies; profit warnings from ADC Telecomms, Concurrent Computer, Kewill Systems, Micron Technology, Planar Systems, RadioShack and Riverstone Networks; and a share split announcement from 3DO (reverse). Additionally, Gemstar indicated it would re-state its 2001 results and Gadzoox Networks has filed for Chapter 11.

Locally

Aqua Online (-20%)
Cape Empowerment Trust (-20%)
Dectronic (-37.5%)
Dimension Data (+20.8%)
ERP.com (+20%)
Infoware (-20%)
Labat Africa (-32.3%)
MGX (-21.8%)
Pinnacle (+40%)
Prism (-21.6%)
Stella Vista (+25%)

Internationally

CMGI (+148.4%)
eGain Comms (+54.1%)
Novell (+60.1%)
PSC (-69.8%)
SBS Technologies (+56.6%)
SONICblue (+58.5%)
Terayon Comms (+63.8%)
VerticalNet (+55.8%)

This week the first 'new` HP quarterly results will be published, and I expect some additional jobs cuts will be announced at the same time. The numbers may well be an indication of how well the new group is doing following the merger and in particular how well it has managed to retain its previous clients.

Fortune magazine has announced its Fastest Growing Companies list, with Nvidia at number one. Other notable technology companies in the top 100 rankings include Siebel Systems at number 19, Manhattan Associates at 23 and Micromuse at 37.