War and PCs

The PeopleSoft/Oracle happenings and the SCO/IBM battle dominated the international world of IT and telecommunications last week.

Last week saw the publication of BusinessWeek`s Information Technology 100, with more changes in it than I have ever seen before.

Paul Booth, MD, Global Research Partners

At home, the events at MGX and the continued interest/speculation in Softline stole much of the local headline space.

• we saw excellent full-year figures from MTN Group (revenue well up and earnings more than tripled); and
• mediocre full-year numbers from Softline (revenues well up but PAT well down) and Vodacom (revenue up but earnings slightly down).

Other local news included:

* the resignation of Peter Flack, chairman and interim CEO of MGX;

* the appointment of Christopher Seabrooke as chairman of MGX;

* a banking lifeline for MGX;

* OSI`s proposal to de-list from the JSE;

* speculation that there could be a third bidder for Softline; and

* M-Five Software appointed Liquid Thought as its black economic empowerment implementation partner for Hansa Business Solutions for which it is the sole distributor.

New local distributorships included that of PIC Solutions for Fair Isaac International solutions and services in Sub-Saharan Africa.

With the publication of the annual results from MTN and Vodacom, we now have two very similar organisations from a financial perspective. Revenues for the last 12 months were R19.4 billion and R19.8 billion for MTN and Vodacom respectively, with earnings at R1.9 billion and R2.2 billion respectively.

* we saw a change in the details of the PeopleSoft/JD Edwards merger in a move intended to speed up the acquisition process;

* Oracle`s improved offer for PeopleSoft;

* SCO`s termination of IBM`s Unix licence;

* AT&T Canada changed its name to Allstream following its emergence from Chapter 11, Key3Media became Medialive International, and USA Interactive changed its name to InterActiveCorp;

* PeopleSoft`s board rejected the improved Oracle bid;

* Cisco`s debt swap that now makes it an 18% shareholder in Cogent Comms; and

* France Telecom sold off its 5.4% stake in Sprint PCS for $330 million.

Additionally, look out for Hutchison Whampoa buying KPN`s stake in Hutchison 3G UK Holdings.

Last week also saw the debut of CeBIT America in New York, which was very poor by European CeBIT standards and was shunned by many of the 'Big Guns`, including Microsoft. Despite this, the venue has been booked for the next five years for this event.

Other international news included:

* the appointments of Gary Cuccio as chairman of Openet Telecom, Michael Gleason as CEO of Change Technology Partners, Mitch Mandich as president and CEO of Edify, Robert Priest-Heck as CEO of Medialive International (ex-Key3Media) and Jack So as CEO of PCCW;

* the resignations of William Avery as CEO of Change Technology Partners, Patrick Bultema CEO of FrontRange Solutions, Richard Foreman as CEO of Register.com, Peter Kazacos as CEO of Kaz Group, Richard Li as CEO of PCCW and Fredric Rosen CEO of Key3Media; and

* job loss announcements from EDS, Flextronics, Openwave Systems and Telefonica.

We saw excellent* figures from Red Hat (back in the black); and very good* numbers from Standard Microsystems.

Good figures* were recorded by Cognos and Progress Software; and satisfactory* ones by Gtech Holdings, SAIC and Spectrum Control.

Mediocre* returns came from SCB Computer Technology and Wegener; while very poor results* came from ADE and Jabil Circuit.

Losses* were posted by Bouygues, California Amplifier, Dataram, Easyscreen, Financial Models, Infonet, Internet Commerce, Intraware, Micron Technology, NaviSite, Norstan, RF Monolithics, Riverstone Networks, Saba Software, SkillSoft, Solectron, Source Interlink, Tibco Software, VendTek, Versus Technology and XKO Group.

Other financial news included share buy-back announcements from eOn Comms and FiberNet; results/profit warnings (often veiled) from AsiaInfo, EDS, Kodak, MMT Computing, ON Semiconductor, Touchstone, Wavecom and XKO Group; share split announcements from Ascential Software (reverse), ComTech TeleComms (3 for 2) and Nam Tai Electronics; planned IPOs by UK-based Logcom on the UK`s AIM market in April next year and by NEC for its semiconductor business in July 2003; and an IPO from Seiko Epson this week on the Tokyo Stock Exchange.

Additionally, Tyco is to re-state its figures from 1998; Read-Rite has filed for bankruptcy under Chapter 7 of the US bankruptcy code, which deals with liquidation; and Engage and Touch America are to file for Chapter 11 bankruptcy protection.

Locally

Acuity (-40%)
Aqua Online (-27.3%)
Cape Empowerment Trust (-25%)
Control (+33.3%)
Cycad (+50%)
DNA (-33.3%)
Idion (-28.6%)
MGX (-60%)
OSI (+40%)
Spescom (+21.1%)

Internationally

Auspex Systems (+400%)
Butler International (+89.1%)
Dice (-76.2%)
Focal Comms (-37.5%)
Gilat (+39.1%)
Intershop (+49.2%)
NCD (+50%)
PCDI (+66.7%)
PSC (+40%)
Read-Rite (-81.2%)
Rural Cellular (+49.3%)

In terms of indices, Nasdaq was up 1.1% and the JSE up 1.6% for the week.

Last week saw the publication of BusinessWeek`s Information Technology 100, with more changes in it than I have ever seen before. At number one for the first time and a completely new entry is Nextel Comms. Other new entries include Western Digital at six, Seagate Technology at 14, Orange at 19 and France Telecom at 26. The major loss from this year`s 100 was EDS, which was at 11 last year.

* 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.