One of Orange County’s larger software makers got off to a mixed start in 2006.
Swedish-based Telelogic AB, whose North American unit is based in Irvine, saw net profit grow by 24% during the first quarter to $3.7 million, versus a year earlier. Revenue shot up by 29% to $32.9 million.
Telelogic, which sells software that helps customers speed up product and software development, is OC’s eighth-largest software company by sales. The company’s North American unit accounts for more than half of Telelogic’s overall revenue.
The company said it expects sales growth of 25% to $216 million in 2006, versus last year. It expects profit to improve in 2006 from last year’s $22.2 million,though it gave no specifics.
Not too shabby, right?
Well, analysts were looking for quarterly operating profit of about $5.3 million compared to the reported $4.3 million, which was up by 27% from a year earlier, according to Forbes.com, which cited SME Direkt, a research company.
That’s quite a miss, and the stock fell about 10% in one day.
You might remember that Telelogic named the head of its Irvine operations, Scott Raskin, the company’s chief operating officer last year. Raskin formerly was president of its Telelogic North America Inc. and Asia Pacific units.
The company also moved its chief marketing officer and senior vice president of global support to Irvine as part of the change.
The company’s other top executives,its chief executive, chief financial officer and chief technology officer,still are based in Sweden. The moves effectively made Telelogic’s Irvine office its “operational headquarters,” though its corporate headquarters remains in Europe.
As for the quarter, in an e-mail Raskin said “earnings growth is always a positive thing,” adding that the first quarter typically is the slowest period for sales.
The Americas showed the most growth in the quarter, up 31% in local currencies, compared to a year ago. The company is looking to expand beyond North America into Mexico and South America, Raskin said.
Asia, however, shows the most promise for growth this year.
“We have been expanding our sales and marketing efforts and will continue to do so,” Raskin said. “We now have direct sales and support offices in China … Korea, Japan, Singapore, India, Australia and Thailand.”
Gateway Looking Up
If you look at how many computers Irvine-based Gateway Inc. shipped in its first quarter, the company “appears reinvigorated,” according to a recent report by Framingham, Mass.-based IDC Research Inc.
The first quarter saw the exit of Wayne Inouye as chief executive and interim chief executive Richard Snyder step in.
Gateway shipped nearly 50% more units in the U.S. during the first quarter compared to a year earlier. That’s faster growth than the top five computer makers. Gateway’s market share rose to 8% compared to 5.7% during the year-ago period.
Top seller Dell Inc., meanwhile, saw growth of less than 1% and a decline in market share.
The first-quarter results put Gateway back to the kind of growth it posted in the third quarter last year.
“The first quarter performance appears to have regained momentum and positions the company very well going forward,” IDC said.
Last week Gateway said its first-quarter sales rose 27% to $1.1 billion, versus a year earlier. Its profit was $1.7 million, before a one-time legal charge.
Really Buying Into OC
Public traded MTM Technologies Inc. of Stamford, Conn., has bought Lake Forrest software maker Axcent Solutions Inc.
MTM Technologies, which already has offices in Irvine, Bakersfield and El Segundo, said the acquisition “expands and strengthens” its Western operations.
The company, which provides technology consulting and integration services, posted sales of $54 million in the quarter ended Dec. 31. Terms of the Axcent buy weren’t disclosed.
Chris Harvey, Axcent’s founder and chief executive, will serve as one of the vice president for MTM’s Western Region.
Blade Runners
The Blade Server Summit held its first event in Orange County late last month.
Blade servers,those slim servers that help pack computing power in a small space,are getting more attention these days, and many OC companies were there to participate.
Mind you, the hall for the exhibitors at the Hyatt in Garden Grove wasn’t that large as conferences go, with less than 75 exhibitors.
Yet Broadcom Corp. was there. The Irvine-based chipmaker had one of the first big booths participants saw in the exhibitor hall. It was showing off its new 2.5 gigabit Ethernet chips for Blade servers. The chip easily is faster than the more common 1 gigabit Ethernet chips.
There were also a handful of OC memory products makers, including Santa Ana-based SimpleTech Inc.
Rivals Costa Mesa-based Emulex Corp. and Aliso Viejo-based QLogic Corp. were at opposite sides of the hall (coincidence?). Their host bus adapters go into blade servers, helping them connect to storage area networks.
