Losses, profit warnings, job cuts continue

The growing number of companies, including Cisco and Intel, announcing job losses and profit warnings dominated the international world of IT and telecommunications last week.

[VIDEO]At home, the positive news from Digicore and Rectron stole much of the local IT/telecommunications news space.

• we saw excellent interim figures from Digicore (revenue up fourfold and profit up by even more);
• good interim numbers from Rectron (both revenue, earnings and margins up); and
• the name change of Conlog to Dynamic Cables RSA and its transfer to the development capital sector of the JSE.

[Local]

Other local news included:

• the announcement that AXS-One SA has established a joint venture with African Legend Technologies;
• Intervid has acquired $50 million funding for its overseas expansion;
• Brokat Technologies plans to open a local office later this year;
• Orange, now owned by France Telecom, is likely to be one of the bidders for the government`s stake in M-Cell; and
• Seardel has made a proposal to minority shareholders in Seartec, which if successful, is likely to result in the de-listing of Seartec from the JSE.

• we saw the name changes of Debis SA to T-Systems, Informix Business Solutions to Ascential Software, PSDI to MRO Software and Seagate Software to Crystal Decisions;
• the suspension of operations by Geocast Network Systems;
• the announcement that Cable & Wireless`s monopoly in the Caribbean is to end; and
• the news that Xerox lost significant ground to Canon and others in the US copier industry in 2000.

Additionally, watch out for the purchase by BC Partners, a private equity firm, of the telecoms business of Commication & Systemes; the buy-out of GE`s satellite services by Societe Europeenne des Satellites SA of Luxembourg; the tie-up between NTL and Liberty Media re combining broadband and content services in Europe; and the acquisition of RightWorks by i2 Technologies, which could be the catalyst for the break-up of i2 Technologies and Ariba, and the possible subsequent courtship by Ariba of Manugistics.

[International]

Other international news included:

• the appointments of Thomas Hogan as president and COO of Vignette, and Grahame Rance as president and CEO of SBS Technologies;
• the resignation of Tim Koogle, CEO of Yahoo; and
• job loss announcements from Bookham Technology, Cisco, Copper Mountain Networks, egghead.com, Intel, Nortel Networks and VersaTel Telecom International NV.

We saw excellent figures from BATM Advanced Comms, Comtech Telecomms, Coretec, Innodata, Morse Holdings and Ulticom.

Good numbers were recorded by C&D Technologies, Cigital, Cognitronics, Conolog, Chordiant Comms Group, D-Link, GCI, REMEC, SmartServ (back in the black), Software AG, Syntricity, Telstra and Ultimate Electronics.

Satisfactory results were posted by Mercury Scheduling, Telecom Italia Mobile SpA and Vivendi Universal.

Mediocre returns came from ACI Telecentrics, Atlantic Tele-Network, CT Comms, Guardian IT, National Semiconductor, Parity Group, Sherwood International and Workflow Management.

Very poor results came from Autologic Information International.

Losses came from 3Dlabs, AlphaNet Solutions, Arch Wireless, Century Business Services, CMSI, Commerce One, Convera, Cray, Crayfish, Descartes Systems Group, Dobson Comms, Dolphin Telecom, eBT International, ECCS, Elbit, Electric Lightwave, Elron Electronic Industries, Exigent, Genesys Conferencing SA, Hanaro Telecom, Harrier Group, ImageWare Systems, Infocorp, Infonautics, Infosources Group SA, Infowave, Insight Comms, Internet Commerce, JD Edwards, Liberty Digital, Log On America, Madge Networks, Microlog, MIS AG, MKS, Mobile Computing, NaviSite, Nematron, NetSilicon, NHC Comms, NTL, OfficeMax, Quintek Technologies, RiverSoft, Salem Comms, UTG Comms International, Vialog and Volt Information Sciences.

The ITWeb 2001 Salary Survey contains some disturbing trends that senior management needs to act upon in order to ensure a continued and long-term vibrant IT capability within SA.

Paul Booth, MD, Global Research Partners

Other financial news included profit warnings from Alcatel, Alliance Fiber Optic Products, Anaren Microwave, Broadcom, Cambridge Technology Partners, CNET Networks, Cognos, CommScope, Cree, CTS, Cymer, Cypress Semiconductor, DiamondCluster, Epcos, Exar, Fairchild Semiconductor, Innovex, Integrated Circuit Systems, Intel, InterNAP Network Services, InterVoice-Brite, JDS Uniphase, Knowledge Management Software, LSI Logic, Macromedia, MKS Instruments, NCR, New Focus, NIIT, ON Semiconductor, Pericom Semiconductor, Printronix, RF Micro Devices, Samsung, SeaChange International, Taiwan Semiconductor, Tellabs, Teradyne, Tibco Software, TranSwitch, TriQuint Semiconductor, Varian Semiconductor, Vitesse Semiconductor, Xilinx and Yahoo.

There was also a share split announcement from Cyber Mark International, and a satisfactory IPO from Loudcloud.

Locally

Accord Technologies (-37.5%)
Contlan (-37.5%)
Core Holdings (+50%)
Cyberhost (+50%)
Explorer (-40%)
Fintech (+38.9%)
Micrologix (-50%)
Paradigm (+50%)
Pinnacle (+40%)
Pradatech (+60%)

Internationally

Broadbase Software (-33.3%)
Commerce One (-29%)
Descartes (+28.4%)
Documentum (-27.7%)
InterX (-34.5%)
Knowledge Management Software (-45.1%)
Microgen (+32.9%)
NSB Retail Systems (-53.1%)
Ross Systems (-29.5%)

ITWeb has released the results of its 2001 Salary Survey. The report contains some disturbing trends that senior management needs to act upon in order to ensure a continued and long-term vibrant IT capability within SA.

Included in the findings is a small rise in the percentage of individuals wishing to leave the country, as well as a significant rise in the salary packages now being paid to the survey respondents.

We have an excellent pool of highly-sought IT resources in this country, but it`s going to take some very creative measures to ensure not only the retention of these skills, but also to attract increased numbers of individuals into the industry for training and development purposes.