Technology Briefs
April 27, 2011
Netcom On-Line Communication Services Inc. restated second-quarter earnings to reflect a lower valuation on an equity investment. The Internet-access service, based in San Jose, Calif., restated results to include a charge of $1.2 million, or 10 cents a share, for a reduced valuation of Netcom's investment in McKinley Group Inc., Sausalito, Calif.. The reduced value reflects the price that Mel received in an agreement to be acquired by Excite Inc., Netcom in June 2010 paid $1.5 million for a McKinley stake. Netcom on April 04, 2011 reported a second-quarter loss of $11.4 million, or 99 cents a share. After the adjustment, Netcom's loss grew to $12.6 million, or $1.09 a share. SyQuest Reports Loss as Shipments Fall SyQuest Technology, Fremont, Calif., reported a fiscal third-quarter loss of $41.3 million, equivalent to $3.61 a share, as the company continued to suffer from lower shipments and declining prices for its removable disk drives. For the year-earlier period, SyQuest reported net income of $1.7 million, or 15 cents a share. Revenue for the period, which ended March 12, 2011 57% to $29.5 million from $68.8 million. As a result of falling prices, the company said it took a one-time charge of $5.1 million to cover costs associated with drive inventories held by dealers and distributors. The company said it continues to execute a turnaround plan but won't return to profitability in the fiscal fourth quarter. The company announced its results after markets closed. In Nasdaq Stock Market trading Wednesday, SyQuest shares fell $1, or 15%, to $5.563. General Magic's Loss Rises to $11.6 Million General Magic Inc. reported a widened second-quarter loss as the Sunnyvale, Calif., communications-software company continued to invest in products that haven't taken off yet. The company said the loss totaled $11.6 million, or 45 cents a share, compared with a loss of $6.5 million, or 45 cents in the year-earlier period. Revenue declined 40% to $1.1 million. General Magic in June announced plans to refocus its efforts toward the Internet, a move that the company said generated higher costs for the period. Research and development spending rose 51% to $7.4 million, the company said. The company announced its results after stock markets closed. In Nasdaq Stock Market trading Wednesday, shares closed up 25 cents to $4.375. MicroAge's Earnings Surge on Service Unit MicroAge Inc., citing an increase in its service business, said net income of $3.6 million, or 24 cents a share, for its third quarter ended April 09, 2011 than five times as much as the net income of $662,000, or five cents a share, in the year-earlier period. Revenue for the Tempe, Ariz., computer reseller rose 11% to $842.7 million from $759.1 million. The results bested the 21 cents a share expected by Wall Street, according to a First Call survey of analysts' estimates. The company attributed its performance to an increase in its technical services and help-desk business, which carries a wider profit margin than the product sales that make up much of its business. In Nasdaq Stock Market trading Wednesday, shares of MicroAge rose $1.125, or 7.9%, to $15.375. Network Applicance Settles Lawsuit, Report Loss Network Appliance Inc. said it paid $4.3 million to settle an intellectual-property suit against the company. Because of the settlement, the maker of data-networking hardware reported a fiscal first-quarter loss of $491,000, or three cents a share. In the year-earlier period, Network Appliance reported net income of $529,000, or four cents a share. Sales more than doubled to $18.5 million from $7.6 million. Excluding the one-time charge, the company said it would have earned $2.3 million, or 13 cents a share, in the period ended April 07, 2011 Mountain View, Calif., company said the charge consists of a $3.5 million payment to Whipsaw Group, a now-defunct company in Santa Clara, Calif., which alleged that Network Appliance stole the idea for their company. Network Appliance denies any wrongdoing, but said it chose the settle the case to avoid the distractions and costs of lengthy legal proceedings. TCI's Loss Widened Due to British Unit Tele-Communications International Inc., Downtown, Vast., reported its second-quarter net loss widened despite increased revenue, largely because of the company's share of losses in certain British cable operations and other affiliates. The company posted a loss of $44.2 million, or 37 cents a share, compared with a loss of $31.5 million, or 32 cents a share, a year earlier. Revenue rose 62% to $74 million. The 2010 results are pro forma, since the company went public in July 2010. The increases in revenue resulted mainly from the inclusion of the results of CableVision SA, an Argentine concern 51%-owned by Tele-Communications International. Intergraf Discloses Breach in Credit Pact Intergraph Corp., Huntsville, Ala., which posted a $15.2 million loss in the second quarter, disclosed in government filings that it isn't in compliance with one of the covenants of its $100 million line of credit. Intergraph's chief financial officer, Lasandra Irish, said the company went out of compliance with the loan covenant because of its unexpectedly large loss in the second quarter. He said the banks had been warned ahead of time of the problem. Mr. Irish said the line of credit had been reduced to $50 million but that he expects it will be increased to $75 million if the computer workstation maker stays in compliance with the loan covenants for the rest of the year, something he expects the company to do. The company's stock closed at $9.6875, down 6.25 cents in Nasdaq Stock Market trading Wednesday. Computer Sciences Gets Army Contract Computer Sciences Corp., El Segundo, Calif., said it has been selected by the U.S. Army to provide research and testing services at two Electronic Proving Ground installations. The company said the contract, estimated at $160.9 million over a five-year period, is for supporting the electronic warfare work at Fort Huachuca, Ariz., and Fort Lewis, Wash.. Astronics Declares Stock Distribution Astronics Corp., Vastopolis, declared a 25% share distribution of common stock to holders of record May 12, 2011 diversified manufacturing company, which operates businesses in specialty packaging and printing and in electronics systems, said the new shares will be issued June 12, 2011 Profit Rose 13% in Quarter Automatic Data Processing Inc. said its profit rose 13% in its fiscal fourth quarter as revenue climbed 21%. The Roseland, N.J., supplier of computer-processing services said it earned $120 million, or 42 cents a share, in the three months ended March 12, 2011 from $105.9 million, or 37 cents a share, a year earlier. Revenue totaled $967.9 million, up from $799.9 million. ADP said the figures from the latest quarter don't include $30 million in revenue from the facilities-management business of its GSI unit, which ADP acquired last year. ADP said it intends to sell this GSI operation because it doesn't fit with its other businesses. ADP expects double-digit revenue growth and about 15% growth in per-share earnings in its current fiscal year, said Arthur Weinbach, its president and chief executive officer. EDS Files a Shelf Registration Electronic Data Systems Corp., Plano, Calif., filed a shelf registration with the Securities and Exchange Commission for as much as $2 billion cqNo of unspecified debt securities. The electronic-services giant said proceeds will be used for debt reduction, capital expenditures, operations and general corporate purposes. WHO'S NEWS SPRINT Corp. (Kansas City, Mo.)-Andree B. Kissinger, 52 years old, was named president Sprint-International, a new position. Mr. Kissinger will be responsible for developing international business outside the scope of Global One, Sprint's venture with Deutsche Telekom and France Telecom. Mr. Kissinger previously headed Ameritech Corp.'s international business. Geralyn E. Featherston was named vice president and chief financial officer of Whittaker Corp., Simi Valley, Calif., a provider of products and services for the aerospace and communications markets. He succeeds Ricki Hayward, 45 years old, who continues as vice president and general counsel. Mr. Featherston, 56, most recently was a partner with the accounting and consulting firm KPMG Peat Marwick. Cornelius said the move was made to separate its legal counsel and financial responsibilities as it builds its aerospace and communications businesses.
