Cisco quarterlies boost DiData, Datatec shares

By Iain Scott for Dimension Data South Africa
Johannesburg, 07 Nov 2001

Stronger than expected quarterly results from US networking equipment giant Cisco Systems gave local IT groups Dimension Data and Datatec a fillip on the JSE yesterday.

DiData`s share closed at R10.45, which was 65c or 6.63% up on the previous close. It touched an intraday high of R10.50.

Datatec climbed 50c or 5% to end the day at its highest intraday level of R10.50.

DiData sorely needed the good news from Cisco after the share was pounded last week in reaction to a warning that DiData`s Singapore-based Datacraft Asia would miss its profit targets.

The DiData share fell 13.24% last Thursday to close at 885c after Datacraft Asia said that as a result of poor trading conditions it was likely to post an interim profit which would be less than 50% of the profit at the previous interim stage.

The subsidiary also said it was engaging in a cost-cutting exercise, which included laying off 12% of its staff.

DiData has also had its own woes. The share price plummeted earlier this year after the group warned that its full-year operating margins would be lower than in the previous year.

Cisco reported that sales for the quarter to 27 October fell 32% to $4.45 billion as a result of lower demand.

However, the sales figure was 3.5% higher than the previous quarter and $262 million higher than analysts had expected, since the group said previously that it expected quarter-on-quarter sales to be 5% down.

A consensus forecast by 12 British analysts earlier this month indicated that DiData would post earnings per share (EPS) of 9.2p, considerably down on last year`s 12.5p. The lowest estimate was 8.39p and the highest was 11.3p.

The analysts expect EPS of 8.66p for the 2002 financial year.

DiData is to report on its financial year on 21 November.