Despite all the optimism bubbling over in Europe only a few days ago (CI No 2,002), everything has turned sour at Amdahl Corp, and the Sunnyvale company announced late Monday that an unexpected recent decline in the level of demand for its new 5995M mainframe computers is likely to result in a loss from operations for the third quarter. Because the new systems have a high unit value and a large number of each quarter’s shipments typically occur late in the quarter, it isn’t possible to forecast third-quarter results precisely yet, said president Joseph Zemke. But based on current information, he believes that revenues will fall below second-quarter levels and that the company could see a loss in the range of 10 to 20 cents per share. We are not getting the sustained growth in volumes we had expected after the rapid rise in revenues last quarter, Zemke said, and that is having a negative impact on earnings. Zemke cited depressed worldwide economic conditions and their adverse effect on capital spending as the primary factor constraining demand for mainframes and storage. Although some improvement in revenues and margins is expected to return us to profitability in the fourth quarter, we do not anticipate substantial growth until these economic fundamentals change.
