Dell, HP Fall After War Worries Comment
NEW YORK (Reuters) - Shares of Dell Computer Corp. (DELL.O) and Hewlett-Packard Co. (HPQ.N) fell on Friday after a Wall Street analyst said their April-ended quarters would be weaker than expected due to signs that the possibility of war is hurting corporate spending on technology.
"It seems as though the uncertainty (surrounding) the war ... has heated up again," Lehman Brothers analyst Dan Niles said.
"It seems to be affecting demand in the United States and it's making us more cautious on the April quarters coming up for both companies," Niles said.
The potential for war will affect spending across the board, but because HP and Dell don't announce earnings until next month, Niles said that current estimates do not reflect that orders have been stunted amid economic uncertainty.
Dell was off more than 2 percent while HP was down almost 7 percent.
Niles said he expects the companies to meet analyst estimates for their current quarters, which end this week, but that January weakened more than expected.
Niles lowered earnings expectations for Hewlett-Packard, which makes printers and computers, in the second quarter ended April to 26 cents per share from 27 cents per share.
He lowered his revenue estimate to a decline of 5 percent from the first quarter vs. a previous estimate of a decline of 4 percent.
He also cut his outlook for the current quarter's revenue by $100 million, he said.
Niles left his estimates unchanged for No. 1 personal computer maker Dell for the current quarter, but said he expects the company to mute their expectations for the April-ended quarter. The company is due to report earnings in the middle of February.
Lehman has rated HP an "overweight" since October and rates Dell an "equal weight."
Dell shares were off 62 cents, or 2.6 percent, at $23.56 in morning Nasdaq trading while Hewlett-Packard gave up $1.21, or 6.7 percent, at $16.99. The broader American Stock Exchange Hardware index (.HWI) was off about 1.5 percent.
01/31/03 11:51 ET |
