Rumours, acquisitions dominate

The HP/Cap Gemini rumours, Microsoft`s activities in Europe and Vodafone`s acquisition of UK-listed Project Telecom dominated the international world of IT and telecommunications during the last two weeks.

At home, UK-based Sage`s offer of R2 per share for Softline and a handful of local results stole much of the local ICT space.

* we saw excellent full-year numbers from Interconnective Solutions (revenue significantly up and back in the black);

* mediocre year-end figures from CCN (ex NetActive) (revenue down but back in the black through sell-off);

* a full-year loss from Zaptronix (revenue also well down);

* an interim loss from Idion Technology Holdings (revenue also down);

* profit warnings from EC-Hold and Grintek (veiled); and

* the suspension of OSI`s shares.

Other local news included:

* Sage`s new offer for Softline, which has been accepted by the non-executive directors;

* Microsoft closed its Durban office; and

* the appointment of John Hurrell as CEO of Westcon`s Middle East and Africa division.

New local distributorships included Autologica`s motor dealer management system by black economic empowerment company, Brainbug Interconnect.

* StorageNetworks announced a liquidation plan;

* the name changes of Apogee Networks to Evident Software and JRE to Cyper Media;

* legislation is being passed in France that will result in the privatisation of France Telecom;

* the closure of Giga-tronics` Dymatix division;

* Radiant Systems` planned divestment of its Enterprise Software business; and

* the termination of the merger talks between Genesis Microchip and Pixelworks.

Additionally, look out for HP`s possible acquisition of Cap Gemini Ernst & Young; the outcome of take-over talks involving Raft International; a possible 'merger` within the Danish telecoms sector; and SAP Systems Integration AG`s acquisition of at least two European and/or US integration companies.

Other international news included:

* the appointments of Hamish Brewer as CEO of JDA Software, Daniel Caclin as CEO of Equant NV, Paul Donofrio as president and CEO of Andrea Electronics, Chris Dukelow as president and CEO of Entricom, Phil Fernandez as president and COO of E.piphany, David Gutridge as CEO of MTC Technologies, Alexander Izosimov as CEO of Vimpel-Comms, Tom Johnson as chairman of Global Imaging Systems, John McKowen as president and CEO of Navidec, Karen Richardson as CEO of E.Piphany, Jeffrey Stiefler as chairman, president and CEO of Digital Insight and Daniel Wu as chairman of GigaMedia;

* the resignations of James Armstrong as CEO of JDA Software (remains as chairman), Didier Delepine as CEO of Equant NV, Pearse Flynn as CEO of Damovo, Roger Siboni as CEO of E.piphany (stays on as chairman), Christopher Sauvigne as president and CEO of Andrea Electronics and Michael Solley as president and CEO of MTC Technologies;

* the death of Richard Kalin, president and CEO of Micronetics; and

* job loss announcements from ASMI, Avnet, BMC Software, Intershop Comms AG, Siemens, TeleWest Comms and Tellabs.

It seems that Microsoft is in trouble again, this time with the European Commission.

Paul Booth, MD, Global Research Partners

We saw excellent* figures from Arch Wireless, BakBone Software (back in the black), chinadotcom, Cray, Cree (back in the black), EPIQ Systems, hongkong.com, NetEase, NICE Systems, Pixar, Spantel Comms (back in the black) and TTM Technologies (back in the black).

Very good* numbers from Allen Telecom (back in the black), Altris, Anteon International, CGI Group, ClickSoftware (back in the black), Crystal Systems, DRS Technologies, DTS, Emtec, Evolving Systems (back in the black), Optus (Back in the black), Pinnacle Systems (back in the black), SigmaTel (back in the black), TransAct Technologies (back in the black), Univision Comms and Wanadoo.

Good figures* were recorded by ACS, AML Comms (back in the black), Bitstream (back in the black), Canon, Captiva Software, Ciber, CompuDyne, Cox Comms (back in the black), Dow Corning, Emulex (back in the black), Encore Wire, Garmin, Hector Comms, Ilog SA, InterVideo, KDDI, MicroStrategy (back in the black), Moldflow (back in the black), Net Servicos de Comunicacao SA, Netsmart Technologies, NII Holdings (back in the black), Nintendo, NTT DoCoMo, Olympus Optical, Pac-West Telecomms (back in the black), Percussion Software, Primus Telecomms (back in the black), Radware (back in the black), RDM, SI International (back in the black), Singapore Telecom, Switchboard, Trimble Tri-Vision International (back in the black), Tyler Technologies and Zebra Technologies.

Satisfactory* results were announced by Adaptec (back in the black), Allin, AMX, Andrew, AXS-One, Bell Canada, BMC Software (back in the black), British Telecom, Business Objects, Cablevision Systems (back in the black), Cadmus Comms, Call-Net Enterprises (back in the black), CareCentric (back in the black), Cimatron, Cisco, Commonwealth Telephone Enterprises, Empresa Nacional de Telecomunicaciones SA, Fayrewood, France Telecom SA, Group 1 Software, GCI, IDS Scheer AG, II-VI, Ikonics, ILOG (back in the black), Imagistics, Ingram Micro, Intergraph, John H Harland, Legend Group, MEMC Electronic Materials, N2H2 (back in the black), Nvidia, Orbotech (but back in the black), PCTEL (back in the black), Radyne ComStream (back in the black), Scan-Optics, Seiko Epson (back in the black), Sykes Enterprises, Synaptics, TDK, Telecom Italia, Telecom New Zealand, Telefonica Moviles SA, Tier Technologies, Trend Micro, Tucows (back in the black) and Verizon Comms (back in the black).

Mediocre* returns came from Allstream (but back in the black), Anixter International, Ansys, APAC Customer Services, Banta, Communications Systems (back in the black), CompuCom, Creative Technology, CSG Systems International, Czech Telecom, Epcos AG (but back in the black), ESS Technology, FEI, Firstwave Technologies, Gartner, Global Axcess, iGate, Intelsat, InterActiveCorp, International Rectifiers, Korea Telecom, Laird Group (but back in the black), Mapics, Matsushita Electric, Maximus, Mercury Computer Systems, Merisel, Nashua, Pegasystems, Perot Systems, QRS (but back in the black), RCM Technologies, Rudolph Technologies, SAP Systems Integration AG, Software AG, Siliconix, SRA International, Sunair Electronics, Telefonica (but back in the black), Tekelec, ThruPoint, Vishay Intertechnology and Xerox.

Very poor results* were posted by Avnet (but back in the black), Forrester Research, Internet Gold, MSX International (but back in the black), NEC and Sprint and Tecnomatix Technologies (but back in the black).

Losses* were announced by Ablest, ActivCard, Actuate, Adept Technology, Akamai Technologies, Alamosa, American Access Technologies, American Superconductor, Analysts International, Applied Imaging, Arc International, Artisoft, ASA International, ASMI, Aspen Technology, Asyst Technologies, Avanex, Axcelis, Axeda Systems, Bell Microproducts, Bogen Comms, Braun Consulting, California Micro Devices, Caliper Technologies, CheckFree, ChipPAC, Clinical Computing, Comcast, Communication Intelligence, Computer Horizons, Corvis, Covad Comms, Crown Castle, CSP, Danka Business Systems, Datakey, deltathree, DiamondCluster International, DSL.net, Duraswitch, ECI Telecom, Elcom International, EMS Technologies, En Pointe Technologies, Endwave, ePresence, F-Secure, Flomerics, Focus Enhancements, Gemplus, Genus, Giga-tronics, Glenayre Technologies, Hitachi, Hytek, I D Systems, I-many, iBasis, iCAD, Identix, Infocrossing, Infonet, Innotrac, Input/Output, Intelidata, Intelligent Systems, Intershop Comms AG, interWAVE Comms International, Ionics, ITXC, Jacada, JNI, Keithley Instruments, LanOptics, Larscom, Legato Systems, Lexant, Logic Devices, Loudeye, Madison River Comms, Mattson Technology, MCT Component Technology, MDSI Mobile, Mercator Software, Meta Group, MetaSolv, MicroHelix, Mitek Systems, MTS, Multilink Technology, Nanophase Technologies, netGuru, NetRatings, Notify Technology, Novadigm, nStor Technologies, NTN Comms, Numerex, Nyfix, On2 Technologies, Onyx Software, P-Com, Paxson Comms, Pegasus Solutions, Pericom Semiconductor, Pro Tech Comms, Quanta Services, Radiant Systems, Ramtron International, RMH TeleServices, Robotic Vision Systems, Roxio, RWD, S1, Safeguard Scientifics, Sanchez Computer Associates, Sapiens International, SCM Microsystems, SEEC, Selectica, ServiceWare Technologies, SimpleTech, Sipex, Sirius Satellite Radio, Softbank, Spirent, Statpro, StorageNetworks, Superconductor Technologies, Symmetricom, Taitron Components, Tegal, TeleWest Comms, Terayon Comms Systems, Terra Lycos, Time Warner Telecomms, TMNG, Tokyo Electron, Toshiba, Tripath Imaging, Triton PCS, TSI Telecomms Services, Tut Systems, Turnstone Systems, TVC Telecom, Ubizen NV, Unova, US LEC, Verso, Vignette, Viisage Technology, Vitria, Vitrix, Wire One, WorldQuest Networks, Ziff Davis and Zomax.

Other financial news included share buy-back announcements from Andrew, Borland, Molex, ScanSoft and Trend Micro; results/profit warnings (often veiled) from ASMI, Business Objects SA, Epcos AG, Fujitsu, Genesis Microchip, MDSI Mobile, Nvidia, ScanSoft, Serena Software and Versant; share split announcements from Interland (reverse) and j2 Global Comms; a very good IPO from Netgear; a satisfactory IPO from Path 1 Network Technologies; and planned IPO announcements from Access Integrated Technologies, DigitalNet Holdings and Israel-based offshore IT services provider, Ness Technologies. Additionally, Peregrine Systems has emerged from Chapter 11 after a reorganisation and Vocalis` shares on the LSE have been suspended.

Locally

Beget Holdings (-23.1%)
FrontRange (+24.1%)
I-Solutions (+200%)
Intervid (+27.3%)
Labat (-11.8%)
Pinnacle (+18.8%)
Prism (+12.5%)
Sethold (+13.8%)
Stella Vista (-60%)
Vesta (+66.7%)

Internationally

BackWeb Technologies (+51%)
Com21 (-41.2%)
Covad Comms (+75.2%)
Internet America (+80%)
Irevolution (-68%)
Macro4 (+43.7%)
Statpro (+45.3%)
Sykes Enterprises (+39.6%)
Tadpole Technology (+51.6%)
Telecom Italia (-71.9%)

In terms of indices, Nasdaq was down 5% and the JSE up 1.3% for the last two weeks.

It seems that Microsoft is in trouble again, this time with the European Commission. The commission`s provisional findings of a probe into the interoperability of Windows server and bundling of Microsoft`s multimedia software suggests that the company is continuing to abuse its dominant position in European IT markets in order to weaken competition and restrict choice, despite an anti-trust ruling designed to curb this type of activity.

* 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.