Network Computing Devices(NCD) said today it will report a net loss for the fourth quarter, slightly larger than the $2.2 million it reported in the quarter before.
In addition, the company said it expects to report a ?modest? restructuring charge related to its recent acquisition of the network displays division of Tektronix.
According to NCD, the fourth quarter loss reflects a sharper than anticipated decline in sales of third party software. The effects of this decline, the company said, would only be partially offset by an expected doubling of revenue from sales of its new thin client products, including Thinstar Windows based terminals and related software.
NCD president and chief executive, Robert Gilbertson, said the Tektronix purchase would boost future revenues: ?Results from this transaction should add approximately 40 per cent more revenue without any significant increase in direct cost, overhead, or technical support. That means that the acquisition will help ensure our return to profitability.?
Industry analysts said that NCD?s earnings had been impacted by the loss of revenue associated with its Citrix Winframe based Wincenter product.
According to US based Zona Research, the core technology that Winframe is built on has been upgraded and is now being controlled and marketed by Microsoft as its Terminal Server Software. Consequently, the market for Winframe, which accounted for an estimated 10 per cent of NCD?s 1997 revenues, is shrinking rapidly.
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