Michael and thread, and now MUEI ...
Can all the analysts spell C-O-N-S-O-L-I-D-A-T-I-O-N ???
Somebody must be eating somebody else's lunch here :^)
/Piotr
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Micron Electronics warns of dramatic 1Q shortfall
By Larry Barrett ZDII
Micron Electronics joined the doom-and-gloom crowd late Thursday, warning that it will miss
analysts' estimates by a wide margin in its first quarter due to lousy holiday sales.
The PC maker joins Gateway (NYSE: GTW) as the latest major PC vendors to warn of
disappointing sales and earnings this quarter.
Ahead of the profit warning, Micron Electronics (Nasdaq: MUEI) share fell $1.06 to a 52-week
low of $5.31.
Company officials said it now expects to post sales of between $385 million to $400 million in
the quarter and earnings of between 1 cent to 4 cents a share.
It's worth noting that Micron Electronics issued the warning at 7:14 p.m. EST.
First Call Corp. consensus was expecting a profit of 11 cents a share in the quarter.
On Wednesday, Gateway warned that pathetic consumer PC sales would cripple its
first-quarter sales and earnings.
Gateway now expects to post sales of around $2.55 billion, more than $500 million below
analysts' estimates. It also said it will earn only 37 cents a share, before charges, well below the
First Call Corp. consensus estimate of 62 cents a share.
Not surprisingly, Gateway shares plunged $10.50, or 36 percent, to a 52-week low of $19
Thursday.
Micron Electronics officials said slow holiday sales and falling DRAM prices were primarily
responsible for the shortfall this quarter.
"The DRAM market is cyclical in nature, and there are certainly challenges in the PC business,"
said CEO Joel Kocher in a prepared release. "But the results for HostPro appear on target, and
we remain focused on executing our Internet-centric strategies."
Last quarter, Micron Electronics topped analysts' estimates when it returned a profit of $23
million, or 24 cents a share, on sales of $500 million.
The stock peaked at $20.69 in March.
Eight of the 11 analysts following the stock rate it either a "buy" or "strong buy."
Analysts were forecasting a profit of 63 cents a share in the fiscal year, a target that appears
incredibly unlikely at this point.
Earlier Thursday, Lehman Brothers cut the stock from an "outperform" rating to "neutral." |
