Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (39650)	8/1/2001 11:47:07 PM
From: Dealer	Read Replies (1) \| Respond to of 65232

Intergraph/INTL "Local News" Intergraph chalks up profitable 2nd quarter Huntsville-based company's sales, earnings fall short of expectations 08/01/01 By BRIAN LAWSON Times Business Writer brianl@htimes.com Intergraph Corp. reported its second consecutive profitable quarter for the first time in seven years, but sales and earnings were below what the company had projected for the quarter. The profit trend marks a turnaround for Huntsville-based Intergraph. The company had struggled under several years of a faltering computer hardware business and a protracted and costly legal dispute with Intel Corp. Intergraph dropped its hardware business and has been bolstered by recent court rulings in its favor concerning a patent dispute with Intel. A federal appeals court ruled this year Intel did not have the right to use Intergraph patented technology in its line of Pentium processors. Intergraph announced Tuesday afternoon that a trial date for the patent claim has been set for January 2003. The company also sued Intel again Monday, claiming the chip giant's new Itanium processor also uses technology patented by Intergraph. The restructured Intergraph has focused on specialty software products and predicted four profitable quarters in 2001. To date, that prediction is on target, but the overall profit level has been below the forecast. The slow economy has affected Intergraph's revenue, said Jim Taylor, Intergraph chairman and chief executive officer, during a conference call with analysts Tuesday afternoon. Taylor said customers have delayed and reduced orders in the face of a weak economy, and he announced the company has revised its earnings and revenue forecasts downward for the rest of 2001. Intergraph reported a profit of $1.4 million for the second quarter of the year, on sales of $127.8 million. The company had estimated its second-quarter performance would be somewhat higher, with sales of $141.5 million and net income of $8.2 million. ''We're concerned about the revenue shortfall, but we're attributing that shortfall to the slow economy,'' Taylor said. ''We're fortunate that we restructured our business last year, and it has helped us manage declining revenues.'' The revised forecast for the year calls for sales revenues of $541.7 million and net income of $10.3 million. Intergraph had projected sales of $585 million and net income of $24.5 million. In restructuring its business, Intergraph is left with a Middle Eastern operation that it is selling, but the departure from that business hurt revenue in the second quarter. The operation had a net loss of $524,000. The company's corporate division, which administers operations and absorbs corporate charges, had a net loss of $3.7 million. The engine that drives Intergraph today is a collection of five separate businesses under one corporate umbrella. The five businesses represent a range of high-end speciality software products. Those businesses include Intergraph Process and Building Solutions, Intergraph Government Solutions, Intergraph Public Safety, Intergraph Mapping and GIS Solutions and Z/I Imaging. Those divisions were all profitable in the second quarter, but results varied. Intergraph Process and Building Solutions, which develops software to build and manage power plants and other operations, reported sales of $27.9 million and a profit of $1.3 million. Taylor said the company has been excited about the federal government's forecast that 1,000 new power plants would be built in the next 20 years, but said an upturn in the business has been slow. ''We haven't seen much growth this year,'' Taylor said. ''Our forecast is flat for the rest of the year, unless there is an upturn or the (Bush) administration decides to bring the nuclear plants out of mothballs." Intergraph Government Solutions, which provides utility and related software for government and industry, had a strong second quarter, Taylor said. The government solutions business reported $31.6 million in sales and $2.3 million in net income. Taylor said the business has a healthy backlog of orders and, because it deals primarily with government contracts, has not been affected by the slowing economy. Intergraph Public Safety deals with law enforcement 911 systems and related products as well as utilities and communications software. The public safety sector has ''nothing but upside,'' Taylor said, and reported some $60 million in backlogged orders. The utility and communications markets have been a ''disaster,'' Taylor said. Customers have delayed deployments on contracts because of budgetary concerns. Both sectors have been weak all year and Taylor does not expect that to change this year. For the second quarter, the public safety business reported revenues of $29.4 million and net income of $1.2 million. Intergraph's Mapping and GIS business, which provides integrated computer mapping, reported revenue of $28 million and net income of $317,000. The two largest contracts for the business involve mapping work in Russia. Those deals are currently stalled while the company awaits word from the Russian government that it can import needed equipment for the work. Taylor said the mapping products generally serve to improve business efficiency, and many companies have delayed related upgrades as they wait for business to improve. Intergraph's Z/I Imaging deals with sophisticated satellite photo equipment. The business reported revenues of $11.9 million and net income of $2.1 million.