Prudential Cuts Dell Fiscal 4Q, 2002 EPS, Revenue Views
Dow Jones Newswires
By Ross Snel
Of DOW JONES NEWSWIRES
NEW YORK -- Prudential Securities' analysts cut fourth quarter revenue estimates for Dell Computer Corp. (DELL) and International Business Machines Corp. (IBM) Thursday, citing expected weakness in demand for personal computers, disk drives and software.
The Prudential analysts also lowered their estimates for Dell's fourth-quarter earnings and fiscal 2002 earnings and revenue.
Prudential now expects Dell to report $8.29 billion in revenue for its fiscal fourth quarter, which ends Jan. 31. That's down from the previous estimate of $8.38 billion, which Prudential lowered on Dec. 4 from an original estimate of $8.75 billion.
In a research report, the Prudential analysts wrote that they are also lowering fourth-quarter earnings-per-share estimates for Dell to 23 cents from 26 cents.
"We are again lowering revenue estimates ... and are also lowering EPS on concerns that demand conditions have further weakened and pricing has intensified," the analysts wrote.
"Over the remainder of the month, it appears that (personal computer) server demand has also softened -- causing us to further question our (previous) revenue growth assumptions. In addition, pricing pressures have intensified across the product line, and we believe these pricing actions have failed to sufficiently stimulate unit demand -- causing additional risk to both our revenue and (gross-margin) assumptions."
The analysts also lowered fiscal-2002 revenue growth estimates for Dell to 15% and their EPS estimates for fiscal-2002 to $1.06 from $1.12.
The analysts cut their fourth-quarter revenue estimate for IBM to $24.5 billion from $25.3 billion. They are keeping their fourth-quarter EPS estimate at $1.39, which is 7 cents below the Wall Street consensus.
Shares of both companies were down in early trading. Dell's stock was being sold at $17.69, down from Wednesday's close in composite trading of $18. IBM shares were being sold at $82.44, down from Wednesday's close of $84.69. |
