Nortel Networks, the telecommunications equipment giant, had little comfort for staff and investors last night as it announced further job cuts.
The Canadian firm, which employs about 3,500 people in Ireland at plants in Belfast, Dublin, Galway and Shannon, was one of a number of major American and European technology firms reporting quarterly figures.
Nortel said it would shed 20,000 jobs worldwide by midyear, up from 15,000 announced previously. The company said it lost $385 million, or 12 US cents per share in the first quarter excluding onetime costs, compared with year-earlier net earnings of $347 million, or 12 cents per share. The figures were in line with analysts' forecasts, dramatically lowered after the company warned at the end of March of a bigger-than-expected loss and more extensive job cuts.
Nortel said it would not provide specific guidance for the second quarter, or the full year, a move that surprised analysts.
EMC, the leading data storage group with a 1,700-strong workforce in Cork, saw its shares gain more than 10 per cent as it met dramatically lowered expectations but confirmed it would meet its latest full year targets.
EMC said first-quarter earnings rose 20 per cent to $399 million, or 18 US cents a diluted share, compared with $332 million, or 15 US cents a diluted share, in the year-earlier period.
EMC's gross margin fell to 55.1 per cent of total revenue in the first quarter, compared with 56.6 per cent in the year-earlier quarter. But EMC president Mr Joe Tucci said the company gained substantial market share.
Computer manufacturer Gateway, whose 1,100 Irish workforce is facing job cuts of up to 200, reported a large first quarter loss, including $533 million in charges taken in an effort to regain footing in the midst of a slowdown in consumer demand. The company said it expected to return to profitability on an income-from-continuing-operations basis in the second half, after breaking even for the second quarter.
Among other technology companies reporting in the US last night, Xilinx saw fourth-quarter net earnings fall short of expectations and Sun Microsystems reported softer-than-expected sales in the third quarter.
Earnings at Sun plunged nearly three-quarters below their level of a year ago, though they beat lowered targets. Xilinx earned 19 US cents a share against consensus forecasts of 22 cents and said it was anticipating a drop of up to 25 per cent in revenues in the current quarter. Between them, the companies employ more than 600 people in Dublin.
Europe's biggest software maker SAP posted first-quarter results that surpassed analysts' expectations and issued an upbeat forecast, pushing its stock ahead more than 10 per cent.
The German firm said operating profits, before charges, rose 82 per cent and that sales growth in the first nine months of 2001 would exceed the 23 per cent seen last year.
In contrast, Europe's largest chip maker, STMicroelectronics warned market conditions may hurt earnings in the second quarter as it reported a 43 per cent rise in first-quarter profit.
