Hardware shares dip on earnings fears
By Binti Harvey, CBS MarketWatch
Last Update: 1:46 PM ET Jan 14, 1999
NewsWatch
NEW YORK (CBS.MW) -- Negative sentiment in the wake of fourth-quarter
earnings results weighed on computer hardware and semiconductor stocks
Thursday.
The Goldman Sachs Computer Hardware Index
shaved off 0.7 percent and the Philadelphia
Semiconductor Index tumbled 2.4 percent amid
concern about March-quarter earnings risks for Apple
Computer (AAPL) and Advanced Micro Devices.
Apple lost 6.5 percent, down 3 to 43 1/2, even after a
positive first-quarter earnings surprise. See related
story. A downgrade from Salomon Smith Barney
accounted for much of the damage, as analyst
Richard Gardner said retail channels may be
overstuffed with iMacs.
Gardner downgraded Apple shares to "neutral" from
"buy," citing increased second-quarter earnings risk
as a result of the high inventories.
Other PC makers followed Apple's lead. International
Business Machines (IBM) fell 3 3/8 to 182 1/8, Dell
(DELL) lost 5/16 to 79, Gateway (GTW) fell 1 1/2 to 55 1/2 and Compaq
(CPQ) dipped 1/2 to 45 3/8.
Semiconductor issues also flagged after AMD reported a fourth-quarter profit
that missed consensus by 4 cents, excluding a tax benefit. See related
story. AMD shares dropped 4 3/4 to 23 as analysts questioned the
company's ability to grow earnings in the first quarter.
Most chip issues lost steam in sympathy. Intel (INTC) fell 4 1/4 to 134 3/4,
Micron (MU) fell 7/8 to 70 1/2 and Texas Instruments (TXN) lost 2 to 91 1/2.
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