Ing C Olivetti SpA, Ivrea, has done its sums again on its 1987 business performance, and now reckons that when all the figures are totted up, consolidated net profits will show a decline of almost 30%, much more than the company had indicated previously. Olivetti blames the slippage on temporary factors – no doubt the switch to a new generation of personal computers was an important factor – and looks for performance to pick up again this year: executive vice-president Vittorio Levi is confident of a return to double-digit sales growth for 1988. The 1987 figures are expected to show net profit equivalent to about $321m from $454m last year, on turnover up only 1.4% at $5,940m (a dramatic increase in dollar terms but that is only because even the lira has been able to look down on the dollar over the past year). As well as the personal computer hiatus, accentuated by the fact that AT&T Co so over-ordered in 1986 that it had warehouses full of the things by the end of the year, and so took only 40,000 new ones in 1987, down from 200,000 in 1986, Olivetti was saddled with substantial reorganisation costs at Triumph-Adler AG. It bought the Nuremburg typewriter, printer and small computer company from Volswagen AG at the end of 1986, and found a can of worms on closer inspection. The losses at Triumph equal the fall in group profits, but it should break even and grow in 1988.
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