....In brief, on closer inspection, that "bottom" in semiconductors appears nothing more than an optical illusion, a dreadful side effect, no doubt, of going so long without even a morsel of good news. Fechtor, Detwiler relays the sentiment of its distributor sources that, grim as the first quarter was, the second quarter will "most certainly be worse."
A retreating tide lowers all boats. We're aware that isn't the usual construction, but right now it seems a heck of lot more pertinent as an economic metaphor. What emerges from the foregoing damage report on the semiconductor business, besides the obvious conclusion that the companies in it are not exactly in the chips, is further confirmation that the slump in technology has spared no one, not even mighty Cisco.
And we suspect, despite a solid first-showing, it won't spare Cisco's rival router-maker Juniper Networks . Calling earlier expectations for this year a bit too exuberant, the company projected earnings for all of '01 at 90 cents to $1 (up from 43 cents last year).
Juniper's a good company, has been taking market share from Cisco, and the stock's down from above 244 to 50 (it jumped seven bucks on Friday on the earnings report).
Trouble is, though, it's dog-eat-dog time in telecommunications and Juniper hasn't been around long enough to really tell how it'll fare in so hostile an environment.
Even though it's way down from its peak, the stock still sells at 50 times estimated earnings, a multiple that scarcely discounts the possible -- we'd say, likely -- negatives.
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