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April 23, 1997updated 05 Sep 2016 12:53pm

TANDEM GETS ITS FINANCES BACK ON AN EVEN KEEL

By CBR Staff Writer

Tandem Computers Inc is stuck. The second quarter numbers look a lot better than those from a year ago, when the company lost $49.6m after a $52m restructuring charge, and are flattered by only a $1m gain on the sale of UB Networks Inc, leaving the outturn at $26m net or $0.22 a share. The problem is that for all its agonies, the company is not growing: sales for the quarter were only $467m, down from $470m last time – and in the first half, it grew only 1.4% to $903m. The company says that overall systems revenue for the first half grew to $525m, up just 2%, and even before the effect of the dollar soaring against the embattled German mark and its acolytes, growth was still only 5%. Demand for the high-end NonStop Himalaya K20000 servers remained strong and sales of mid-range K-series servers were 22% higher than in the same quarter last year, the company reports, adding that it continues to enhance the NonStop Himalaya K-series servers while shaking down its new ServerNet technology-based NonStop Himalaya S-series servers for shipment this quarter. Telecommunications sales meant that quarterly revenues from the Unix-based Integrity FT and S4000 servers increased over the last year, while Tandem continued to seek to woo its existing customers over to Windows NT, saying it seeded existing and new large accounts with its Windows NT Server systems, and expects ships to rise significantly by fiscal year-end. The company says it derived 76% of revenue from its primary markets in telecommunications and finance. Product margin of 58% represented an improvement of 2.3 points over the same quarter last year. Inventory was at 40 days, down 12 days from the December quarter, and 15 days from second quarter 1996.

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