According to its executive vice- president, Mitchell Kertzman, Sybase Inc is making progress in improving areas of concern, identified after reporting a disappointing first quarter (CI No 2,647) that sent its stock plummeting, but treasurer Kathy Nyrop avoided questions about whether the company’s guidance on full year financial results remains the same: both executives were at the Hambrecht & Quist conference in San Francisco where analysts estimated Sybase will earn $0.75 a share in 1995, which would be a 37% drop from 1994 earnings of $1.18 a share; a main piece of Sybase’s fix-it plan is the shipping of SQL Server Release 11 by September and in limited, or beta, quantities next month; With release of SQL Server 11 we will remove the scalability cloud ha nging over us, said Kertzman, refering to the slowdown in sales of SQL Server 10 because it didn’t scale beyond six processors, while competitors’ offerings did; inadequate sales execution and a vague marketing message were two other problems Sybase identified, and the company has made management changes in sales and is retraining its staff; the fourth problem related to two applications developers not getting their software offerings out on time to work on Sybase products.
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AST Research Inc expects its gross profit margins to improve in the current fourth quarter ending June, from third quarter levels, said Bruce Edwards, vice-president and chief financial officer but he added Our gross profit margins are not at the level they need to be at – we expect further improvement in this area: industry analysts generally expect AST’s gross margins to come in slightly higher than the 13.0% level of the March quarter; when AST reported its third quarter results in April (CI No 2,651), chief executive Safi Qureshey told Reuters there would be a return to profit in the fourth quarter and for the full fiscal 1996; Edwards added that Samsung Electronics Co’s purchase of 40.25% of AST brought equity investment and a chance to boost overall volume by providing components like dynamic memory chips and monitors.
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Read-Rite Corp has raised its gross margin target to 22% to 25% of net sales, from 21% to 23%, a level described as more appropriate by chief executive Cyril Yansouni.
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Seagate Technology Inc executive vice-president Stephen Luczo told the 23rd annual Hambrecht & Quist Technology Conference that the company is aiming for gross margins of 20% to 22% of net sales for fiscal 1995, which would compare with the 19.5% gross margin achieved in the March quarter: he also said Seagate is looking for tactical acquisitions, particularly in the software area but did not elaborate.
