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General Magic: Good show

The networking services company shrinks its losses for the second quarter by sharply cutting operating expenses.

    General Magic (GMGC) has shrunk its losses by sharply cutting operating expenses for the second quarter ended June 30.

    General Magic incurred a net loss of $6.7 million, or 25 cents per share, compared to a loss of $11.6 million or 45 cents per share for the same quarter last year.

    Revenues, however, continued to slide, hitting $300,000 for the quarter, down from $1.1 million a year ago and $500,000 in the previous quarter.

    The networking services company, which has undergone management changes during the quarter, is pinning its hopes on the rollout of the Serengeti network service. In a conference call today, president and CEO Steve Markman described Serengeti as "the electronic equivalent of an executive assistant."

    James McCormick of UB Networks, who was named as chief financial officer on June 11, warned that he doesn't expect revenues to increase in 1997.

    "During 1997 we expect to have no significant revenue as we devote our resources to getting the Serengeti service out in a timely manner," McCormick said in the same conference call.

    Operating expenses decreased to $7.7 million for the quarter, compared to $9.3 million for the previous quarter, and $13.4 million for the same quarter last year.

    However, the cash impact of the savings was offset by payment of obligations accrued in 1996.

    Markman was upbeat about the company's performance for the quarter: "Our team is substantially in place. We are squarely focused on a sound, well thought-out business plan which addresses the most promising opportunities for the company--a plan which we have successfully executed to date."