SB - reason for GTW rise?? BTW, it's that time in the quarter for GTW to warn or rumors to fly (based on last two quarters).
...Gateway 2000 Inc. shares rose amid expectations that the direct
seller of personal computers will have a robust holiday season
without having to cut prices.
Gateway 2000 shares climbed 2 3/4 to 32 after analyst
Matthew Russo with Sands Brothers & Co. told the brokerage firm's
sales force that Gateway 2000's fourth-quarter sales are going
well and the company's average per-unit price isn't likely to
fall from third-quarter levels.
''Sales have been strong, especially at the $1,999 to $2,499
price points,'' said Russo, who has a ''strong buy'' rating on
the stock.
Russo's comments, combined with similar positive remarks
from competitors including Compaq Computer Corp., reassured
investors that Gateway 2000 hasn't been forced to cut prices to
compete with entry-level PCs sold in retail stores for $1,000 or
less.
The North Sioux City, South Dakota-based PC maker's shares
have fallen more than 45 percent since July as the company
reported lower-than-expected earnings because it misjudged demand
and had to write down the value of high-priced inventory.
Russo declined to say how he obtained information about
Gateway 2000's fourth-quarter sales. He said call volume, or the
number of customers calling in to order PCs, ''has been going
very well'' so far in the quarter.
Gateway 2000 is expected to earn 44 cents a share in the
fourth quarter, according to the average estimate of 18 analysts
surveyed by IBES International Inc. That estimate is down from
more than 65 cents a share this summer, before Gateway 2000
warned of disappointing third-quarter earnings. |
