Possible trouble spots in tomorrow's market (MU, MUEI, etc.)
Looks like Sam was right, the bad news isn't over yet.
cbs.marketwatch.com
Micron Tech misses profit target
By Binti T. Harvey, CBS MarketWatch
Mon Mar 16 18:10:03 1998
Micron Technology (MU) shares are prepared to topple Tuesday after
the memory chip maker posted a wider-than-expected second-quarter
loss of 41 cents a share. The Street's consensus forecast was a loss of 17
cents a share. Excluding an 18-cent gain for the sale of one of its
businesses, the loss comes to 23 cents a share vs. a year-ago profit of 68
cents. Revenue at the Boise, Idaho, company decreased to $755.4 million
from $876.2 million in the second-quarter of 1997. Micron said its
memory chip sales plunged to $283 million from $440 million in the first
quarter of 1998, plagued by "dumping" by its Asian competitors. Shares
closed up 3/4 at 33 3/4 ahead of the report.
Micron Electronics (MUEI), a subsidiary of Micron Technology, also
reported second-quarter results after the market closed. The direct-sales
computer manufacturer posted a profit of 26 cents a share, including a
loss from its PC operations and a gain on the sale of its custom
manufacturing services business. Analysts surveyed by Zacks Investment
Research expected a loss of 5 cents a share. Micron didn't respond to
requests for per-share figures excluding extraordinary items. Sales fell 3
percent from year-ago levels to $494.8 million. Ahead of the report, the
stock closed up 1/16 at 11 13/16 ahead of the report.
Encad Inc. (ENCD) shares could dip Tuesday after the company warned
it will miss first-quarter views by a landslide. The printer manufacturer
expects to break even or report a loss in its first quarter, while the Street
was expecting a profit of 33 cents a share. Encad forecast a significant
decline in first-quarter revenue from year-ago levels, citing
lower-than-expected sales and margin pressure. Furthermore, the
company sees fiscal 1998 results falling below 1997 levels. Encad expects
to return to profitability in the second quarter, with improvement in the
second half of the year.
Chip-equipment manufacturer Electro Scientific Industries Inc. (ESIO)
reported third-quarter results below expectations. The company posted a
profit of 65 cents a share, excluding merger charges, compared to 55
cents a year ago. Analysts' consensus view was 68 cents a share. Sales
increased to $57.6 million from $45.8 million in the third quarter of 1997.
Shares closed up 2 1/2 at 37 1/2.
Shares of Iomega Corp. (IOM) got an 18 percent haircut after the data
storage product manufacturer warned it will report a first-quarter loss.
Iomega expects to lose between $10 million and $25 million and record a
negative cash flow. The First Call consensus estimate for the quarter was
a profit of 9 cents a share. Iomega cited lower-than-expected sales, with
particular weakness in international markets. Iomega also expects
inventory to rise further in the first quarter. Iomega shares closed down 1
1/2 at 7 1/8.
Compaq Computer Corp. (CPQ) edged higher on word that it plans an
inventory-slashing move to give business customers free monitors and
other accessories with purchases of its desktop personal computers.
Goldman Sachs analyst Rick Schutte said the move will likely be the first
of many promotions as computer makers engage in aggressive pricing to
rid themselves of older technology. Schutte expects the move to reduce
Compaq's inventory levels, but believes it will cost the company in the
near term. Schutte, who didn't change his earnings estimate, said he's
already taken into account price erosion following Compaq's earnings
warning last month. Compaq shares ended the session up 1/16 at 25
7/16.
Chip-equipment manufacturer Novellus Systems Inc. (NVLS) gained 2.3
percent after BancAmerica Robertson Stephens initiated coverage with a
long-term "attractive" rating. The firm cited Novellus' leadership in the
chemical vapor deposition market as well as its progress in developing
processing equipment for the transition to copper instead of aluminum
wires in semiconductors. BA Robertson Stephens forecast earnings of
$2.35 in fiscal 1998 and $3.25 in 1999. Novellus shares edged up 1 to
close at 44.
Shares of IBM Corp. (IBM) and Motorola Corp. (MOT) each advanced
after the two companies introduced an improved version of the PowerPC
microprocessor. The new chip runs at 300 megahertz, compared to prior
speeds of 266 megahertz. The Power PC chip is primarily installed in
computers using Apple's (AAPL) Mac OS operating system. IBM closed
up 1 5/8 at 101 1/4 and Motorola closed up 3/8 at 56 5/8.
Kemet Corp. (KMET) dipped following a downgrade from BT Alex.
Brown. The firm lowered the shares to "market perform" from "buy."
Kemet manufactures capacitors, used to store, filter and regulate electrical
energy flow in computer products. Shares closed down 3/8 at 19 11/16.
Information Storage Devices Inc. (ISDI) shed 16 percent following a
first-quarter earnings warning. The integrated circuit maker said it sees
revenue falling short of analysts' expectations by 20 percent. Analysts
expected earnings of 1 cent a share. The company attributed the shortfall
to postponed orders by a major customer and lower-than-expected
orders from a Japanese customer. On the news, BancAmerica Robertson
Stephens lowered its first-quarter estimate to a loss of 11 cents a share,
and it cut its revenue forecast to $12 million from $15 million. Information
Storage shares closed down 1 1/8 at 5 7/8.
Binti T. Harvey is an online reporter for CBS MarketWatch. |
