Concern about declining average selling prices was the key factor today.
From the Bloomberg story (after the close):
The company blamed the shortfall on customers deferring purchases in anticipation of Intel Corp.'s new Pentium III chips, which were introduced last week. It also cited falling prices on its consumer products and slow government sales. The company made the warning after the close of regular U.S. trading. ''I think the fact about average selling prices being under pressure is more of a concern than Intel, which is short term, and a big reason why the market reacted as it did,'' Owens said.
Some analysts cut their estimates today following Micron Electronics' warning. Peter Lab at The Buckingham Research Group lowered his rating to ''market perform,'' from ''buy.'' Kurtis King of NationsBanc Montgomery Securities Inc. analyst, cut his rating to ''hold,'' from ''buy.'' And Kimberly Alexy, at Prudential Securities Inc., lowered her rating to ''accumulate,'' from ''strong buy.''
Micron Electronics is the latest company to be hurt by sluggish demand for PCs. Compaq Computer Corp., the No. 1 PC maker, said on Friday that sales to corporate customers in January were slow. That prompted analysts to cut earnings estimates for Compaq as well for Intel, which makes the chips found in 85 percent of the world's PCs.
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