The string of warnings from Texas Instruments and other chip companies in the last few weeks is usually a harbinger of bad things to come for the broad technology sector. Integrated Device Technology (the former Tundra) just joined the woeful choir, warning that sales fell about eight per cent since the spring quarter.
However, there is reason for hope that an economic slowdown may not be as deep or long as feared.
Some big software companies are predicting healthy results in the near future, and other companies are also doing well.
Consider Adobe Systems and Oracle, which surprised analysts with good news in the August quarter and better-than-expected profit forecasts for the November quarter.
The giants don’t get a lot of Ottawa attention, but they have about 500 employees in the region.
Adobe has big hopes that an enterprise software business, which includes the former JetForm Ottawa business and next-generation products, will drive a strong quarter after faltering during the slow summer months.
Chief financial officer Mark Garrett said a strong pipeline of deals would drive enterprise sales by 20 per cent for the full fiscal year, a forecast implying a 25-per-cent jump in the November quarter.
He said weak enterprise sales in Europe in the August quarter were the big factor in modest overall results.
Sales rose only seven per cent to $270 million in the August quarter, disappointing analysts.
Oracle generated strong results from high-end server sales and software licences.
Service revenues from government and other clients was strong.
While others struggled with the European market, Oracle said business application revenues were strong.
Gennum Corp. swam against the chip industry tide, beating analyst expectations for the August quarter despite a restructuring charge that reduced profits. Sales of the Burlington company, which has Ottawa design operations, rose 6.7 per cent from a year earlier to $36.7 million, beating analyst forecasts by more than $2 million. Gennum said orders were in line with expectations.
It is outsourcing parts of manufacturing tests and logistics to cut costs. It also plans to buy back up to 10 per cent of stock to try to lift prices.
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Despite a shaky economy, companies are finding new cash. Three small Ottawa companies have raised capital to finance operations. Clearford Industries generated $700,000 to support wastewater treatment deals it expects soon from India and South America. Long-term supporter Rod Bryden raised his stake to about 23 per cent of Clearford stock and options. PharmaGap raised $175,000 of a targeted $500,000 effort to finance a cancer drug test program. Seprotech gathered $600,000 to finance production of some key waste water technology contracts.
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Delcan, an Ottawa engineering company, won a project of the year award for its work on the Somerset Street Chinatown Gateway Arch.
The American Public Works Association said the project, backed by the cities of Ottawa and Beijing and the Canadian government, was tops in projects under $5 million.
Darryl Edwards, a former senior sales executive with Nortel, has joined the board of directors of EX-FO Inc., a Quebec City maker of optical networking gear.
Eagle Professional Services, an Ottawa staffing and consulting company, said sales rose 28 per cent to $110.5 million in the year ending in September, its 15th year in business. The private company did not disclose other results.
RJR Innovations of Ottawa said that buying a QSignOn business from PricewaterhouseCoopers brought $1 million in recurring business – a 25-per-cent increase – and three new employees. The business software company sells highsecurity sign-on computer tools to major Canadian police forces.
QNX Software said its high-performance operating system was delivering emergency response, navigation and hands-free communication through the OnStar FMV, a new rear-view mirror now available to aftermarket customers. QNX is owned by Research in Motion.
Shopify, an Ottawa e-commerce company with 16,000 retail customers, is teaming up with Points International, a Toronto loyalty rewards management company, to broaden appeal. Shopify has more than 70 employees.
The Ottawa Life Sciences Cluster at OCRI is making a new push to generate investment and business opportunities for 93 companies. Led by executives at Nordion, Abbott and DNA Genotech, the sector has released a new directory of local companies and research bodies.
Source:http://www.ottawacitizen.com/technology/Software+forecasts+predict+solid+hopes+recovery/5467993/story.html
