PALO ALTO, Calif. -(Dow Jones)- Wall Street has maintained a somewhat
calloused eye toward Sequent Computer Systems Inc., but maybe it's time
for that gaze to soften.
Sequent is a computer-hardware company that has bet its future on a
new computer architecture, Numa-Q 2000, and the present second quarter
will prove a key indicator of whether that architecture will be a
roaring success.
But Sequent management is giving every indication that the rollout of
the new server is quite successful. The company is really poised to
"break out," said Chief Financial Officer Bob Gregg.
The problem, Gregg said, is that Wall Street "doesn't believe Numa is
as good as we think it is. It's a 'show me' market and we intend to do
that."
For instance, Gregg said the company is comfortable with analysts'
estimates for the second quarter, keeping in mind that it now gets more
big orders and that one order can make or break a quarter. Wall Street
expects earnings of 20 cents a share and revenue of about $180 million.
That compares with 10 cents a share a year ago and shows a 26% rise from
revenue of $142.6 million a year ago.
Gregg also said the Beaverton, Ore., company fully intends to build
its order backlog in the second quarter, a sign customers are
increasingly interested in the Numa-Q system.
Behind the momentum are market dynamics that play to Sequent's
newfound strength. First, large companies continue to move programs and
projects off mainframes and install powerful Unix servers. One such
common application is a "data warehouse," where employees sift and sort
through massive data repositories for information about customer trends
and the like.
Meanwhile, corporations continue to install packaged applications
software from makers such as Baan Co. NV, Peoplesoft Inc. and Oracle
Corp., creating the need for computer hardware. Applications packages
commonly automate functions such as human relations and financial
bookkeeping.
To its credit, Sequent has met two of three delivery milestones for
new features this quarter and a third appears ready to take place.
So far, Sequent has delivered expanded memory for the product, of 16
gigabytes of RAM from 4 gigabytes, so Numa can hold larger databases.
The server also can be outfitted with a ring of fiber-optic cable to
more rapidly transfer data from the many disks it stores.
Sequent said it expects to deliver a third feature, clustering, this
month. Clustering will enable customers to link Numa-Q to the company's
older Symmetry machines. Clustering also will permit a Symmetry machine
or an adjacent Numa-Q server to take over the duties of a Numa-Q that
fails.
Investors became concerned recently when word got out that the
introduction of clustering had slipped by a couple of weeks. Gregg said
a developmental problem came up but has been fixed.
Wall Street also has been eagerly awaiting performance benchmarks on
the Numa-Q, a wait that should come to a end this week. Sequent said it
will release a benchmark for the computer hardware running applications
software from Baan. The benchmark will be the first of several this
quarter and the performance figures will be outstanding, company
officials said. |
