Amdahl fails to reverse fortunes

Attempts by plug-compatible mainframe manufacturer Amdahl to re-invent itself as a services company suffered a major setback last week when it reported losses of more than $326.6m (#198m) for the year ended 31 December 1996.

Amdahl put the loss in part down to charges of $151m paid for consultancy and services companies DMR and Trecom Business Systems in late 1995 and early last year.

The company remains bullish about its future, despite static revenues of $1.6bn, only $1m up on 1995 figures, when it posted a profit of $28.5m.

Fourth-quarter revenues reached $491m compared with $416m for 1995's fourth quarter. Losses fell only slightly to $34m compared with $38.4m for the same period last year.

The company said its future lies in consultancy and services. Alan Bell, vice president and general manager of European operations, said sales picked up after Amdahl released its new products late last year.

'It's important for us to show we have profitable growth in 1997. There was no way we could get through 1996 without losing money,' he said.

Mark Lillycrop, director of analyst firm Xephon, said: 'I don't think things are looking too good for Amdahl at the moment. The results don't look particularly impressive.'

Its results were in marked contrast to mainframe storage manufacturers EMC and Storagetek, which posted 1996 year-end profits of $386m and $138.3m respectively.