Hey – this is getting very close to a return to the glory days of the mid-1980s, when IBM Corp still thought the whole world was going its way: Salomon Brothers analyst John Jones said he raised his 1995 and 1996 earnings estimates on IBM to $10.00 a share this year, up from $7.85 previously and his 1996 estimates to $11.00 a share, up from $9.35 previously; given IBM’s caveat that things won’t be as good for the rest of the year as they were in the first quarter, $10 a share looks highly optimistic.
Picking a few later items out of IBM Corp chief financial officer Jerome York’s chat with analysts after the figures on Thursday, although he had previously raised the possibility that the company would make a major acquisition with its cash, he said There’s no King Kong acquisition on the horizon right now, adding that IBM was looking at only small things; he said the Personal Computer Co ran into trouble when it started producing more than 3m computers a year because its parts procurement, manufacturing and shipping systems had been designed for lower-volume production in other IBM units – 1,000 mainframes, 5,000 Series/1s, 10,000 8100s, a year, that sort of thing – couldn’t handle the capacity, leading to shortages in the more fancied models – We have a massive program to revamp this but it will probably take over a year to get it all done, he said; he predicts that mainframe revenue will be down for the full year, but won’t say by how much; OEM sales of disk drives, while still clearly not what it should be given IBM’s prowess in disk technology, did rise 50% compared with the first quarter last year; improvements at disks and personal computers accounted for about 20% of the profit rise in the first quarter, even if the latter were not in themselves profitable; IBM sold – or gave away as prizes – 1.1m copies of OS/2 Warp in the quarter, for a total OS/2 installed base of more than 9m; an uncomfortable two thirds of software sales of $2,900m is still for mainframes.
Toshiba Corp denied a report in the Nikkan Kogyo Shimbun that it had decided to invest $1,200m in Oregon for a new chip plant: it agreed it is considering shifting part of its semiconductor production overseas because of the yen’s appreciation, but nothing concrete has been decided yet on the possible overseas plant’s location, kinds of semiconductors we would be making or many other things, the company advised.
Unisys Corp’s figures, page five, show the defence business as discontinued operations, although the money they make still go through its profit and loss account: the Blue Bell company saw flat earnings per share year over year from continuing operations, and a decrease in earnings per share from the defence side, which should have been sold to Loral Corp by June 30; Unisys saw worldwide orders rise in the quarter with strong growth in software, departmental servers and desktop systems; services revenue grew 33% in the quarter, and represented over 30% of total turnover.
IBM Credit Corp, Stamford, Connecticut, reporting first quarter net profits off 2% at $57.9m, says its return on average equity was still 22.3%, compared with 22.2% in the first quarter of 1994; in the first three months, IBM Credit originated financing totalling $3,200m for equipment, software and services for IBM’s end-user customers and distribution channels, compared with $2,100m in the 1994 period; end-user financing increased 89% to $1,050m, working capital financing for distribution channels increased by 36% to $2,140m, the firm said.
FirePower Systems Inc, where Canon Inc is the controlling shareholder, will be showing the first PowerPC multiprocessor system running Windows NT at Comdex/Spring this week.
In an apparent attack on Microsoft, Sun Microsystems Inc chairman Scott McNealy told the Washington Post that a giant company he did not name should be prevented from using its market power to dominate related businesses, like on-line and financial services: McNealy also urged the US Federal government to st
op subsidising the same company’s systems that are based on closed or proprietary technology; McNealy was visiting Washington to try to rally support for ensuring greater competition in the computer industry.
Silicon Graphics Inc believes it can double its sales to the entertainment industry yearly for several years, chief financial officer Stan Meresman told Reuters: Now the entertainment side of part of our business is about 15%; Meresman said Silicon Graphics continues to target total annual revenue growth in the low 40% range – for the first nine months of its fiscal 1995, it grew 43% to $1,500m; gross margins rose to 53.6% in the third quarter from 52.4% in the second.
Queen’s Awards for Technological Achievement go to Blackhawk Automotive Ltd, Ashford, Kent for its Shark computerised measuring system; Marconi Instruments Ltd, St Albans, for its RF frequency synthesis sustem using fractional-N techniques; Quantel Ltd of Newbury for the Henry Concurrent Editing System; Racal Instruments Ltd, Slough for test systems for Groupe Speciale Mobile and DCS 1800 base transceiver stations; STC Submarine Systems Ltd, Greenwich for its submarine telecommunications systems that use Erbium-doped fibre amplifiers; and Snell & Wilcox Ltd, Petersfield, Hampshire for its electronic film transfer equipment.
Psion Plc’s handheld computers headline a host of winners of Queen’s Awards for Exports; also in there is AT&T Global Information Solutions (Scotland) Ltd of Dundee for its teller machines and other self-service terminals; Chase Research Ltd, Basingstoke, for its storage peripherals; Copeland & Jenkins Ltd, Wellingborough, for its micro disk components and leadframes; the Bristol-based Cray Systems Space Division of Cray Electronics Plc for its space industry software services; Densitron Microwave Ltd of Southend for its RF and microwave components and systems; A C Egerton Ltd, Orpington for external telecommunications line equipment; Euro Talk Ltd, London SW for language compact disks for computers; Hewlett-Packard Ltd, Bracknell, Berkshire for exports of electronic products for measurement, computation and communications; Loughborough Sound Images Ltd for its sub-assemblies for computers; Lyson Ltd of Stockport for its inks for colour ink-jet printers; two awards go to Motorola Ltd one for cellular equipment made in Swindon and the other for cellular phones made in Bathgate, West Lothian; Optical Fibres Ltd of Deeside, Clwyd, wins an exports award for its optical communication fibres; Parallax Software Ltd, London W for graphics software; Seos Displays Ltd of Burgess Hill for visual displays for use in research and training simulators; Sony Manufacturing Co UK Ltd, Pencoed, Mid Glamorgan for monitors; and Trak Microwave Ltd, Dundee wins an award for ferrite microwave components.
Northern Telecom Ltd has a $100m contract to supply WilTel, now owned by LDDS Communications Inc, with high-capacity optical transmission products over two years.
At the launch of Oracle Corp’s Very Large Memory option on Digital Equipment Corp’s new Turbo Laser servers (CI No 2,647), Oracle said the technology will follow on the AlphaServer 2100s, but to take advantage of it in the kinds of situations DEC and Oracle were talking about last week you need large amounts of RAM (like 6Gb) and lots of input-output and processor-memory bandwidth – costly, and also likely to grind a 2100’s backplane into the ground.
Oracle Corp is so impressed with the Digital Equipment Corp Turbo Laser performance it is buying in a bunch for its internal financial and decision support requirements.
Thank God I’ll be retired by the time we get to 128 bits, says Oracle Corp’s Larry Ellison.
Digital Equipment Corp also introduced IBM Corp’s CICS/6000 transaction processing monitor for Alphas running Digital Unix at $7,800-up, including the Transarc Corp Encina components, $300 for the client.
Digital Equipment Corp has a new data warehouse advisory service and will open Database Technolo
gy Centres in the Boston area, Palo Alto, in Tokyo, and somewhere in France.
Digital Equipment Corp has updated its AlphaServer 2100 Sable line with the model 5/250, based on a 250MHz 21164 and priced from $60,000; the 21064-based 4/233 costs $22,000; the 275MHz 21064-based $26,500, and the 233MHz 21064-based 4/233 at from $18,000.
Digital Equipment Corp last week cut prices of its Prioris family of servers and its HiNote notebook computers in the US and Latin America: the new prices are as much as 26% lower for some of the Prioris servers, and up to 24% lower for models of the HiNote line, it said.
Nynex Corp has signed an interconnection agreement for Massachusetts with Metropolitan Area Network operator MFS Communications Co Inc; Nynex described it as the first US interconnection agreement of its kind outside New York State and only the fourth such comprehensive agreement anywhere in the country.
North Korea is ready to take one small step to end its isolation – it is planning to establish a free trade zone at its northernmost tip where it meets both China and Russia and foreigners will be allowed to visit it without visas: opening of the Rajin-Sonbong zone has been delayed until a 50-mile wire fence can be built around it, evidently to prevent capitalist ideas from filtering into the rest of the regimented communist country; in the zone, South Korean and other foreign investors will be offered tax and other business privileges.
