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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Glenn McDougall who wrote (6015)	8/19/1998 6:56:00 AM
From: Glenn McDougall	Respond to of 18016

High-tech stages a revival One in six moves from loss to second- quarter profit James Bagnall The Ottawa Citizen While second-quarter earnings virtually collapsed across North America, Canada's high-tech firms put on a show of surprising strength. A Citizen survey of 90 high-tech firms reveals that net profits for the group swung sharply to $235.7 million from a loss of $64.2 million. This compares with an ultraslim two per cent year-over-year profit gain recorded by Canadian industry generally, according to a Financial Post survey of 152 firms that belong to the TSE 300. Profits were even weaker in key technology sectors south of the border. U.S. software firms posted zero growth in the second quarter, according to a survey by Business Week. Computer manufacturers as a group recorded a net loss of $1.6 billion U.S. Results like these have helped in recent weeks to undermine the health of stock markets around the globe. It also explains in part why strong profits at many relatively small Canadian technology firms haven't necessarily translated into gains for shareholders. The second-quarter jump in Canada was triggered largely by corporate turnarounds. No fewer than 15 of 90 firms got their acts together and moved from a second-quarter loss last year into the black this year. This compares with only six firms that slipped from profits to losses over the same period. The comeback was especially pronounced among the 20 high-tech firms headquartered in the Ottawa region. The group of 20 reported second-quarter profits of $26.6 million -- providing a dramatic contrast with last year's $197.7-million loss. Much of this reversal reflects the improved situation at Ottawa-based Corel Corp., where losses have shrunk to $12 million from $163 million. At the same time, four local companies that recorded heavy losses in the second quarter of 1997 came through with profits in the most recent quarter. These include: Calian Technology Ltd.; DY4 Systems Inc.; Newbridge Networks Corp. and Simware Inc. However, group profits for Ottawa-area firms are still a long way from where they were in the mid-1990s, when net margins averaged more than 11 per cent of sales. In the second quarter of 1998, earnings were a trim 2.3 per cent of sales. Profits at 70 firms based outside the Ottawa region were a more robust 8.1 per cent of revenues, up from 6.9 per cent in the second quarter of 1997. Absolutely stellar growth at a few large firms -- notably, ATI Technologies Inc. of Thornhill, Ont., and Geac Computer Corp. of Markham, Ont. -- accounted for much of this improvement.