Quiet week sees profit warnings, MCI settlement

The news re UK-based international yellow pages directories business Yell and its IPO, and the $250 million settlement from MCI dominated the international world of IT and telecommunications last week.

It seems Microsoft is creeping back into the news with new concerns being expressed regarding the "licensing of Windows communication protocols".

Paul Booth, MD, Global Research Partners

At home, the activities at Global Technology and MGX stole the local ICT headline space during an extremely quiet week worldwide, but one that did include the US`s Independence Day holiday.

We saw a profit warning from Jasco and a further profit warning from Intervid.

Other local news included:

* the restructuring of Intervid into two units;

* a request by Cycad and Peregrine Capital, two of the largest minority shareholders in EC-Hold, for a forensic audit of the deals involving the 'money` lent to MGX;

* the possible de-listing of Pinnacle;

* a restructuring at Johnnic Comms;

* the appointment of Mark Taylor as MD of Nashua Mobile; and

* the announcement that we could know who the second national telecoms operator will be by early September.

* Additionally, Global Technology is still discussing a possible buy-out of the banking interests with its ex-CEO Ray Leonard, but is also investigating the winding-up of various subsidiaries.

New local distributorships included that of the Core Group for Adobe and Sahara for Samsung`s laser printers.

* we heard that Norway intends to sell-off a $1 billion stake in Telenor, which would reduce its shareholding to 64%;

* the news that Baltimore Technology is likely to be broken up and sold-off;

* the sell-off by Marconi of 32% of its shareholding in broadband provider, EasyNet;

* the possible bid for Sherwood International by SunGard; and

* the news that MCI would issue $250 million in common stock of the reorganised company to shareholders and bondholders hit by the WorldCom fraud.

Additionally, look out for the floatation of Yell, the UK-based international yellow pages directories business, on the LSE this week. When it happens, it will be the largest UK IPO this year and would propel Yell into the FTSE 100.

Other international news included:

* the appointments of Hank Carabelli as president and CEO of Pac-West Telecomm, Mark Diamond as CEO of SED International Holdings, Jean Diamond as chairman of SED International Holdings, Roger Foster as executive chairman of Financial Objects, Chumpol NaLamLieng as chairman of Singapore Telecomms, Michael Torto as president and CEO of Centive and Halsey Wise as president and CEO of Intergraph;

* the resignations of Ang Kong Hua as chairman of Singapore Telecomms, Randall Kruep CEO of Procket Networks, David Curruthers as CEO of Financial Objects and Alex Mendez CEO of Sanera Systems; and

* job loss announcements from Insightful, Kemet and Siebel Systems.

We saw good figures* from INSCI and satisfactory* ones by Agilisys.

Mediocre* returns came from Audiovox, while very poor results* came from Microlog (just in the black).

Losses* came from 3D Systems, Merx, Neon Systems, Preferred Voice, Prologic Management Systems, Tadpole Technology and Terremark.

Other financial news included results/profit warnings (often veiled) from ActivCard, Adaptec, Arc International, Commerce One, Documentum, ECI Telecom, Insightful, Intershop Comms AG, LSI Logic, Marlborough Stirling, Micrel, NetScout Systems, Parametric Technology, Redback Networks, Siebel Systems, Stratex Networks, Terayon, Verizon Comms and WebMethods.

There were also new share issue announcements from Imagination Technologies and Tom.com; and a planned IPO from Netgear (Internet networking equipment) later this month. Additionally, ThreeFive Photonics BV has filed for the Dutch equivalent of Chapter 11.

Locally

AST (-17.6%)
Cycad (-33.3%)
DNA (+50%)
Elexir (-33.3%)
Faritec (+13.6%)
Infowave (-16.7%)
Jasco (-16.7%)
MGX (-27.3%)
Sethold (+19.2%)
Vesta (-33.3%)

Internationally

DA Consulting Group (-33.3%)
Dice (-70%)
Focal Comms (-59.2%)
Geoworks (-40%)
Information Resources (+30.9%)
InterVoice (+38.6%)
Marlborough Stirling (+28.8%)
NEC (+29.4%)
NTELOS (-33.3%)
Terayon (+31.1%)

In terms of indices, Nasdaq was up 2.4% and the JSE was up 1.2% for the week.

It seems Microsoft is creeping back into the news with new concerns being expressed regarding the "licensing of Windows communication protocols" released to ISVs under the terms of last year`s anti-trust settlement. If the situation is not resolved quickly, there is a likelihood the 'can of worms` could be opened up again.

* NB

Guidelines for the categorisation of results are as follows. The figures 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 are in excess of 50%.

* Good: Both revenue and net income growth are 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.

* Loss: A loss has been recorded.