STOCK WATCH

RM

RM has reported a 25 per cent increase in pre-tax profit to #10 million for the 12 months ended 30 September, up from #8 million in the previous year, boosted by strong growth in its software and services business. Sales increased 19 per cent from #110 million a year ago to #131 million, as the company proclaimed that it was well positioned to take advantage of the government's increased IT budget to schools under the National Grid for Learning initiative.

Under the programme so far, RM's primary schools revenue has increased by 60 per cent.

LERNOUT & HAUSPIE

Lernout & Hauspie, the voice recognition specialist, is under investigation by the Securities and Exchange Commission for the way it has accounted for some of its acquisitions.

The Commission revealed it was examining 12 of the 23 takeovers the Belgian company has made since 1996, prompting L&H's shares to fall $3 to $36.125. The announcement follows L&H's admission last month that it may have to change the way it accounted for acquisitions in its third quarter, a move that could knock 10 per cent off future earnings.

GATEWAY

Gateway shares tumbled 11 per cent on 3 December, following a warning by Wall Street analysts that the vendor's fourth-quarter turnover will fall short of their expectations.

Shares fell by $6 down to $51.75 after an analyst at Credit Suisse First Bolton said Gateway's sales may increase by 15 per cent to $2.3 billion and not by the 20 per cent earlier forecast.

CABLETRON

Cabletron Systems has revealed it will report a third-quarter loss of about 10 cents a share, instead of the profit Wall Street analysts had expected for its third quarter ended 30 November. Analysts were expecting a profit of about 11 cents a share, but the networking specialist claimed price pressures, longer market acceptance time and shifting technology had all had an adverse affect on performance. The company expects revenues for the quarter in the range of $330 million to $340 million, compared with $331.8 million in the same period a year ago.

VIDEOLOGIC

VideoLogic saw a pre-tax loss of #378,000 for the six months ended 30 September, down from #2.93 million a year ago. Turnover for the period declined to #4.16 million from #5.46 million last year, but chairman Geoff Singles said strong initial sales of Sega's Dreamcast games console would help the graphics technology group report a profit in the second half and full year. VideoLogic supplies the key graphics technology for Dreamcast, just launched in Japan.

JD EDWARDS

JD Edwards posted net income of $37.7 million for its fourth-quarter ended 31 October, up 65 per cent on $22.8 million a year ago. Revenue for the quarter increased 42 per cent from $216.6 million in 1997 to $307.1 million. During the year, the enterprise software specialist increased net income by 100 per cent to $74.5 million. Revenue was $934 million, up 44 per cent from $647.8 million this time last year.