Iomega will cut jobs and reduce inventory after reporting that it will make losses of between $25 million and $35 million for the second quarter, ending 27 June. The Utah-based storage drives manufacturer will cut up to 700 jobs - more than 10 per cent of its workforce - and reduce costs to operate like an OEM rather than a retail supplier. The move followed losses of $18.6 million.
Omnimedia will pay £17 million for software business SEC in a surprise reverse takeover which will see SEC staff offered shares. The move by the AIM-listed multimedia publisher to buy Sales Engineering and Computer Consultants (SEC) will give up to 70 SEC staff 1,666 shares each, worth about £1,000. It also guarantees a stock market listing for SEC, to be enlarged and renamed Systems International Group.
IBM stock fell $2 to $110 following Merrill Lynch's predictions of decreased second-quarter earnings. The analyst estimated earnings per share would go down from $1.52 to $1.45 due to weak PC sales, despite an expected revenue rise of three per cent.
The IT sector flexed its muscles in a recovery attempt last week, with key names seen to be strengthening the overall Nasdaq market. Compaq, Intel, Microsoft, Cisco and Dell all showed gains, despite the fact that IBM dipped slightly. Dell jumped five points to 85p in light of the easing off of selling pressure relating to the Asian crisis.
Profit warnings continued undiminished last week, with Arrow Electronics, Cerprobe and Digital Link all predicting second quarter shortfalls. The disappointing results were attributed to insufficient demand for semiconductors and the Asian crisis.
Itnet saw stock surge by 22 per cent to 427p when investors - excluded from a hugely oversubscribed share offer - raced into a buying frenzy. Prices for the company, formed from Cadbury Schweppes' computer outsourcing business, had started on the London Stock Exchange at what was regarded as an expensive 350p.
Accounting and commercial software supplier Cedardata has put increased profits down to its move from the public to private sector. Cedardata saw pre-tax profits escalate by 62 per cent to £2.6 million in the year ending 31 March. It stated it was now selling 70 per cent of products to private companies rather than suffering slow orders from public sector customers. Turnover was up from £10.4 million to £12.5 million.
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