Excerpts from WSJ Barrons bus wk. in my week-end reading
WSJ-Gateway article
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interactive.wsj.com
Mr. Niles added that he was impressed with year-over-year growth in the number of PCs sold by Gateway, which increased 33% to 736,000 units during the second quarter. That growth bodes well for other PC makers, particularly Dell Computer, he believes. Although Mr. Niles predicts Dell's average selling prices will fall about 4% sequentially this quarter to $2,400 from $2,485, "unit growth should be enormous."
And unlike Gateway, "Dell didn't have any new marketing push," he added. "They benefited from component cost declines so gross margins should be coming up."
Gateway certainly benefited from the sinking cost of parts, including memory chips, disk drives and displays, for its computers. Gross profit margins hit a record 20.6%, up from 19.5% in the first quarter.
But some analysts warn that falling component prices can't save the company's margins forever, particularly as average selling prices continue to drop. "There's a question of how low can you go," said Ashok Kumar of Piper Jaffray Inc. "Once that slope starts flattening out, you're up a creek," he said.
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interactive.wsj.com
BRITISH TELECOM is reportedly close to striking an alliance with AT&T in which AT&T would replace MCI Communications as BT's partner in the Concert international venture. BT has been looking for a new partner since the failure of its proposed merger with MCI.
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Enron agreed to acquire British water supplier Wessex Waterby for $2.24 billion in cash. The acquisition is the electricity and natural gas giant's first step in establishing a new company to pursue the international water market.
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The Dow industrials ended a four-day losing streak on Friday, posting a slim gain of 4.38 to 8937.36. But it was still a difficult week for investors, with the industrial average down 400 points, or 4.3%.
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Gateway shares dropped 10% Friday after the personal-computer maker missed Wall Street's second-quarter profit estimates, but some analysts saw a silver lining for the PC sector in the company's report.
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General Motors agreed to return disputed equipment to a strike-idled stamping plant, fostering hope that a resolution to the strike is near. GM also said it plans to reopen the Chevrolet Corvette plant in Bowling Green, Ky., on Monday, using auto parts from other sources.
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Nokia's pretax profit rose 67% for the first half, topping analysts' estimates, as the Finnish telecommunications company got a lift from stronger-than-expected sales of mobile phones.
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Competing factions reached a compromise that, if passed by Congress, would allow more foreign computer programmers, engineers and other skilled workers to work in the U.S.
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Greenspan joined with Treasury and Securities and Exchange Commission officials to oppose a move by commodities regulators to take a greater role in overseeing over-the-counter derivatives.
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Puerto Rico Telephone's management and the leaders of the company's two unions reached an agreement to end a 37-day-old strike. The terms of the accord were not revealed.
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Russia's central bank lowered its benchmark refinancing rate to 60% from 80% in a bid to help rejuvenate the nation's troubled economy.
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An appeals court, in a case that has been closely watched in financial and technology circles, found that a data-processing system may be patented.
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France's Group Bull, a day after posting a huge loss for the first half of the year, lowered its 1998 sales outlook, citing a downturn in its smart-card activities. Investors responded by unloading their holdings in the stock Friday and Bull's shares were suspended on the Paris bourse.
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GE Capital will buy Japanese consumer-finance firm Lake, continuing a string of acquisitions by the U.S. company as it seeks to increase its operations in Japan. Financial terms weren't disclosed.
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A federal judge formally approved a settlement of sexual-discrimination claims against Smith Barney, resolving a lawsuit that alleged lurid pranks were commonplace at a Long Island office |
