This is the sort of thing that will cause some of the froth to fly off the overheated Wall Street share markets if too many more companies come out with similar warnings: shares in Hauppauge-based Standard Microsystems Corp fell sharply yesterday after the company, which operates in the ultra-fashionable field of networking equipment and related chips, projected a loss for its first quarter – the shares slumped 22% or $4 to $14 in late morning trading in response to news tha t it expects a loss of 20 to 25 cents per share for the quarter ended May 31 on revenues of about $70m against 41 cents per share profit on sales of $80m this time last year; the projection reflects a loss at its system products division, where sales fell due to plans to cut excess distributor stocks.
And Walker Interactive Systems Inc warned that it expects to report a second-quarter loss of between three cents and eight cents a share after it failed to meet its sales targets; a year ago, it lost $11.4m on sales of $16.3m, and sales this time are expected to be between $14m and $15m; the company says the volume of its licence revenue each quarter is dependent on a few substantial orders that must be finalised during the quarter, and that some of the significant opportunities we have been working on have either been delayed or have been lost to competition; the delayed ones tie in with the indicators showing a sharp decrease in capital goods orders in the US in April.
And Austin, Texas-based Summagraphics Corp says it expects to report a loss for the fourth quarter and year to May 31, having reported a profit of $0.22 per share for the previous fourth quarter and a profit of $0.29 per share for the 1994 fiscal year: it says its fourth quarter performance continues to be hurt by continued higher-than-projected expenses related to introduction of its ink-jet plotter line and results have been hurt by a downturn in sales and charges andwrite-offs of assets it has made.
Interesting reaction: Donaldson Lufkin & Jenrette analyst Thomas Rooney told Reuters that he had downgraded IBM Corp to a hold from a buy based on the company’s takeover bid to buy Lotus Development Corp: We think it’s a bad deal, Rooney said, but declined to comment further until he has explained his view to the firm’s clients; IBM’s shares were off $1.75 at $92.125 in heavy trading.
Virtuality Group Plc, Leicester, is in the early stages of what could be really big business with its virtual reality automobile simulators – Ford Motor Co is saving wear and tear on its new Galaxys by investing ú200,000 in 10 Virtuality machines in which potential buyers will be able to test-drive the car without leaving the showroom, but the Mail on Sunday got a bid ahead of itself when it said that the group had won an order worth up to ú20m from Kawasaki Co for about 1,000 driving simulators: Virtuality says it is working on the second stage of a significant development contract with Sumisho Electronics Co for virtual reality software for Kawasaki, but that the project was at a very early stage and no firm production orders had been taken.
Ing C Olivetti & Co SpA rang from Ivrea to issue a flat denial that any form of preliminary understanding exists with Hewlett-Packard Co on personal computers, and say that creating free-standing personal computer and office equipment units is only a medium-term possibility (CI No 2,677): it also contests the figure of $150m for the losses for the personal computer business, indicating that the unit did $1,220m last year at the current rate of exchange and that the losses were about 10% of turnover.
Logica Plc’s UK chairman Colin Rowland resigned yesterday after 24 years with the firm to spend more time with his family: Logica says he will probably work part-time within the industry on a consultancy basis but could not say if he would maintain links with Logica; no replacement is being sought and Rowland’s former responsibilities will be shared by other officers.
Winston-Salem, North Carolina
-based Wachovia Corp (because it watches over you?) has called in IBM Corp for a $30m project to upgrade technology and enhance customer service at its offices and its Wachovia On-Call 24-hour telephone banking arm; hardware and sofware includes OS/2 Warp and bank officer worksations from IBM, Hewlett-Packard Co Network Hubs and teller workstations, servers and printers from AT&T Global Information Solutions, and Lexmark International Inc printers.
Tandy Corp says sales at US and Canadian retail outlets were up 29% in May compared with the same month last year, at $399m, and that sales at stores open a year ago rose 8%.
Motorola Inc reckons there is a lot more money to be made out of pagers if only the things can be made to appear young and exciting and alive – so it has persuaded the master of schlock horror and gratuitously offensive advertising, Benetton SpA – the company that appeared to be claiming responsibility for a terrorist car-bombing when it created a poster of a blazing car tagged with United Colors of Benetton – to lend its name to a new line of pagers to be sold wherever the paging system operates in such a way that the pager rather than the pagee pays for the call: according to Dow Jones & Co, Benetton has licensed its name and is providing creative consultation on the garishly-coloured pagers, which cost ú100, and Benetton and Motorola are looking for annual sales of $160m by 2000.
The Taligent Inc venture of IBM Corp, Apple Computer Inc and Hewlett-Packard Co is set to unveil its CommonPoint object development software today: the three Taligent backers plan to include the software in their operating systems.
Monett, Missouri-based community bank software and hardware specialist Jack Henry & Associates Inc has a letter of intent to buy the Sector business unit of Nationar: Sector markets software to banks and has an installed base of about 34 customers mainly in New York State.
Troy, Michigan-based Sandy Corp is a popular girl: the company is already under offer from Westcott Communications Inc for $10 a share cash with the possibility of that being raised to $11, and yesterday it got an offer of marriage from Automatic Data Processing Inc, which wants to pay $12 a share in shares for Sandy’s 2.3m shares out.
Singapore’s number two multimedia equipment manufacturer Aztech Systems Ltd claims to have one of the world’s first IDE-based six-times speed CD-ROM drive, the CDA 668-01E: the drive transfers data at 900Kbps and has an average acces time of 225mS; no price was given.
We’re a bit miffed that we didn’t get one, but somebody tried to stage an amateur ramp in Tadpole Technology Plc shares on Friday: both the Daily Mail and the Daily Telegraph received an anonymous note saying that Tadpole was in talks with Amstrad Plc, backing it up by saying that Alan Sugar’s Rolls Royce with with personalised AMS 1 number plate – had been seen leaving Tadpole’s Cambridge headquarters late on Thursday; the idea that Sugar would be interested in a low-volume high unit price outfit like Tadpole is a bit hard to take, but both papers checked and found that Sugar has been holidaying on his yacht and goes next to Japan.
