Thu, Mar 07, 2002 - Page 17 News List

Trend Micro CEO bungles his sales growth numbers

By Dan Nystedt  /  STAFF REPORTER

The chief executive and founder of Trend Micro Inc (趨勢科技), the computer-virus slaying software firm, said his company will grow by 70 percent this year as markets recover and businesses purchase more anti-hacker and anti-virus products to protect servers and Internet connections.

"Anti-virus software used to be a small undertaking, but over the past few years it has become a major concern," Trend Micro Chairman and CEO Steve Chang (張明正) said yesterday.

But the firm's financial officer stepped up almost immediately and tempered the CEO's enthusiasm for 2002 by stating firm numbers for the company.

Trend Micro forecasts revenue growth of 27 percent this year to ?40 billion (US$308 million), and net income is forecast to nearly triple to ?7.3 billion (US$56 million) from ?2.4 billion (US$19 million) last year.

"Earlier, Steve said we would grow by 70 percent, and now I'm saying 27 percent. That is the difference between a chief executive officer and a chief financial officer," quipped Mahendra Negi, chief financial officer at Trend Micro.

The CEO said the economic downturn last year was very challenging for Trend Micro, as it turned to a loss in the second quarter and announced a US$19 million write-off on stockpiled inventory. Sales recovered in the third quarter and took off in the fourth.

In a recent government report, Trend Micro was named one of Taiwan's top software firms with "world class intellectual property."

While the company is often held up by the government as an example of Taiwanese ingenuity, most officials fail to point out that even though Trend Micro was founded in Taiwan by a Taiwanese citizen in 1985, the company moved to Japan due to archaic financial regulations here.

The nation had not yet embraced the idea of stock options -- key to attracting talented software developers. Start-up companies often rely on stock options to make up for low salaries until the company begins selling products.

In Taiwan, Trend Micro was unable to offer this incentive, so it moved to Tokyo and listed on the Tokyo Stock Exchange.

One analyst said Trend Micro is a good example of a business driven away from Taiwan by poor government policies. He said the current argument on whether or not chip firms should be allowed to invest in China is a similar example of government standing in the way of business.

Better financial sector regulations which encouraged China-bound companies to remit earnings back to Taiwan would enable the nation to profit from being a base of operations for companies who set up manufacturing in China.

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