Underlining what a knife-edge even the most successful companies operate on, shares in Motorola Inc tumbled by about 10% on Friday after it warned that it may take US distributors several months to work off excess cellular telephone inventories built up during the fourth quarter: the shares lost $6.50 at $58 after the company gave analysts the warning and also said the weakness in sales of its integrated radio system equipment is continuing in the first quarter; it won’t be taking any unusual charges against first quarter and it expects the first quarter will be a good growth quarter for cellular subscribers, but growth will not be in line with expectations.
L M Ericsson Telefon AB said its sales of mobile phones in 1995 have been in line with forecasts, and it has no inventory problems like those cited for Motorola Inc, but that didn’t prevent its shares falling and dragging Stockholm down.
Compagnie des Machines Bull SA, showing a net loss of $377m for 1994, down from $976m, but an operating profit of $45.6m, reckons it is positioned to report a net profit this year: it says it expects to proceed with its privatisation process under good conditions and embark on a new stage of development; Sequent Computer Systems Corp also confirmed that it has put in a bid for a 10% stake in the company.
Germany is lobbying its European Community partners to support a proposal to the Group of Seven that aims to open US communications and media markets for European investment, Post Minister Wolfgang Btsch said in an initiative worked up with France, responding to demands by AT&T Corp for guarantees of access to European markets: the US bans foreigners holding more than 25% of telecommunications or broadcasting companies, but basic telephony is in the hands of state monopolies in both Germany and France.
Vobis Microcomputer AG, Aachen reports 1994 sales equivalent to some $1,750m, on which it made pre-tax profit up some 67% to about $35m.
Now Austria’s electricity generators want to get in on the telecommunications act: the Ministry for Transport & State Industry should reach a decision on the licence for a second mobile phone network by the end of March for service in 1996, and national generator Verbund is a contender along with regional electricity suppliers.
Microsoft Corp joined the Justice Department’s appeal of Judge Stanley Sporkin’s rejection of their anti-trust settlement late Thursday and Assistant Attorney General Anne Bingaman issued an ominous warning to the company, saying that one aspect complained of by the judge, her stonewalling on discussion of other possible evidence of Microsoft’s wrongdoing was in part because she wanted to reserve the option to bring more charges against the company at some later date and discussing in open court what evidence the government had against Microsoft might prematurely show the government’s hand and hamper negotiations for future settlements – we may in the future decide that we want to sue Microsoft for some of those practices, if additional evidence comes to us or the market changes, she declared.
Enterprise Computer Holdings Plc again failed to release its interim figures on Friday, putting it down to a technical hitch, Enterprise’s Les McNeill mysteriously adding that it was related to tidying up a burden inherited from the past, and that the reason would be revealed in tomorrow’s statement, when its interims might, or might not, also be released: the company has been in talks with its bankers and advisors since August 23 last year but McNeill added that the future looks very positive; The share price at suspension capitalises the company at just ú2.4m.
AT&T Corp signed Tata Telecom Ltd to market its speech processing systems in India: Tata Telecom will also provide custom application design, engineering, development and comprehensive service support,
India’s Southern Petrochemical Industries Corp and Australia’s state-run Telstra Corp signed a joint venture agreement to bid for ba
sic and cellular telephone projects in India, and will concentrate on the south of the country.
Hughes Escorts Communications Ltd, an Indian joint venture of Hughes Network Systems Inc with Escorts Group Pte Ltd, has launched a very small aperture terminal shared hub for high speed data and voice communication, and says it is the first private company to offer the value-added service in India; the hub is in Gurgaon, near New Delhi, and Hughes will lease transponder space on Insat-2 to offer India-wide private satellite services.
IBM Corp chairman Louis Gerstner joined New York Governor George Pataki to announce that the $70m it is to invest building a new headquarters complex in Armonk will be part of a $245m capital investment programme in the state this year, and praised the new Republican regime; Pataki said his administration will take over for about $13m three surplus IBM buildings in the mid-Hudson region and use them to consolidate the state’s data processing operations, now scattered over 49 sites; the move is promised to save taxpayers some $50m a year.
Meanwhile Louis Gerstner is selling off the family silver: IBM Corp’s art collection was started by Tom Watson Sr in 1937, when he decided that the company’s pavilion at the New York World’s Fair should include art from all the 79 countries where IBM did business, but now, reports the Wall Street Journal, the collection, which includes American masters such as Winslow Homer, George Bellows and Marsden Hartley, has appreciated enormously, and about 300 pieces are to be put up for auction at a series of sales in May and in the autumn at Sotheby’s New York auction house; they are expected to fetch $25m.
Alcatel Cable SA is suing the Paris daily Liberation for libel over the article alleging that the company might have overbilled Electricite de France: it will seek damages of $165m, matching the 4.35% drop in its market capitalisation on Tuesday when the article was published; it is also suing a former employee, made redundant last November, for theft of documents and breach of corporate secrecy, saying he had been the source of the false information reported by the press.
Correction: yes, yes, this Microsoft anti-trust dust-up is preying on the headline writer’s mind – the company that is teamed with Sony Corp on broadcasting automation is of course Oracle Corp, as was clear in the story (CI No 2,605).
Cute idea, ICL, but it’s yet another example of a computer company not understanding how the equipment it sells is used, and the work practices of its customers: ICL Plc has discovered the italic font in its character set and has started giving its products names such as OPENframework, searchaccelerator – subscribers to the paper edition of Computergram will get the message, because we have carefully reduced the names to fit and stuck them on, but the host of on-line subscribers – including ICL itself – won’t have a clue what we are talking about, because it will be a long time before the average electronic mail or database text retrieval system will be able to handle boldface, let alone italics.
