Wang Global reports loss
The information technology services company reports a net loss of $260.5 million, falling below Wall Street earnings expectations.
The net loss of $5.73 per diluted share came on revenues of $833.3 million. Excluding several charges and accelerated amortization, earnings per share would have been 3 cents. The charges include a $74.1 million writeoff of in-process R&D in connection with the acquisition of Olsy. Other charges incurred include a $134.8 million reduction in the carrying value of previously acquired intangible assets, $25.8 million of restructuring and integration expenses, and $16.1 million of other operating charges.
In connection with the Olsy acquisition, the company also recorded $18.8 million of amortization related to the $14.6 million higher than originally anticipated price.
By the end of the June quarter, the company had already reduced its workforce by 1,450 of the planned 2,300 reductions for 1998. Wang said it expected to meet or exceed its overall target of 3,100 reductions before the end of calendar year 1999.
"The results for the quarter reflect Wang Global's focus on the restructuring and integration of the Olsy operations acquired in March of this year," Wang Global chairman and CEO Joseph M. Tucci said in a statement. "We already have evidence that our integration efforts are producing the results we expected."
For the fiscal year ended June 30, the company reported revenues of $1.88 million and a net loss of $281.6 million, or $7.29 per diluted share.
Wang Global also announced that it will change its fiscal year end from June 30 to December 31, during 1998. Results for the transition stub period will be reported via a Form 10-K filing covering the six-month period ending December 31, 1998.