Here is some back-up to the numbers:
1) IDC: "Total 1998 PC volume was just shy of 90 million units, 12 percent ahead of 1997's 80.3 million units:"
(Look under 1/29/99)
idc.com
2) Here's something on ASP's from OfficeMax:
"However, sales at the company's computer segment fell 26% in the latest fourth quarter to $97.4 million from $130.8 million last year, on a "precipitous" 27% decline in average selling prices for computers."
"OfficeMax said last month that its disappointing performance is attributable to changes that have increasingly rendered computers, particularly low-end models aimed at entry-level users, a commodity product."
Complete article:
OfficeMax Posts Loss in Quarter,
Hurt by Restructuring of Unit
An INTERACTIVE JOURNAL News Roundup
CLEVELAND -- OfficeMax Inc. Tuesday reported a fiscal fourth-quarter
loss as the result of hefty charges taken to realign its computer-business
segment.
The office-products retailer reported a net loss of $6.7 million, or six cents
a share, for the quarter ended Jan. 23, including a charge of $49.9 million
for the liquidation of computer inventory and impairment of prepaid
expenses. Without the items, the company posted a profit of $43.2 million,
or 36 cents a share, which was a penny a share better than the mean
estimate of analysts surveyed by First Call.
In the year-ago quarter, the company earned $40 million, or 32 cents a
diluted share.
Sales rose 13% to $1.25 billion from $1.11 billion.
OfficeMax said core business segment sales for the latest quarter rose
18% to $1.15 billion. Same-store sales, or those at stores open at least a
year, edged up 5% for the quarter. Earnings from the core business
segment rose 16% to $41.4 million, or 35 cents a share, from $35.8
million, or 29 cents a share, a year ago. The segment handles such items as
office supplies, furniture, business machines and printing services.
However, sales at the company's computer segment fell 26% in the latest
fourth quarter to $97.4 million from $130.8 million last year, on a
"precipitous" 27% decline in average selling prices for computers. The
segment sells desktop computers, laptops and monitors. The computer
business segment posted earnings of $1.8 million, or one cent a share,
before a charge, compared with $4.2 million, or three cents a share, a year
ago.
The company's decision to forgo low-margin, low-profit computer
promotions also hurt the computer segment's results. Same-store sales for
the computer business segment plunged 43% in the fourth quarter.
The company's Internet sales in the latest fourth quarter rose more than
1,100% from a year ago. The company's Web site is receiving more than
two million visits per month.
OfficeMax said last month that its disappointing performance is attributable
to changes that have increasingly rendered computers, particularly low-end
models aimed at entry-level users, a commodity product. It said the new
plan for its computer business calls for it to move away from low-end
products and in favor of pricier models aimed at business, high-end
consumers and home-office customers.
The company also said last month it intends to begin reporting results of its
two business segments separately to better show their operating
performance.
OfficeMax said it plans to open at least 100 new, full-size superstores in
the U.S. this year, as well as up to five new OfficeMax PDQ locations and
additional delivery and distribution facilities -- including one devoted to
delivery of online orders. The company also plans to remodel nearly 70
stores.
OfficeMax also plans to open its first superstores in Sao Paulo, Brazil, and
continue to expand in Mexico and Japan with an about 10 stores and two
delivery centers. |
