Earlie: Briefing.com comment supports what you and MB said, although a little bit too late<g>. It is interesting that we all know K-6 chips sell like hot cakes, and even if AMD growth expectation is going to be lower than forecast, then what will happen for INTC?
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From Briefing.com:
INGRAM MICRO (IM) 18 5/8 CLOSED. This one is clear cut. Before the open Thursday, Ingram Micro (IM), the world's largest wholesaler of computers and technology products, warned that earnings would be below expectations. They said in the press release, "Many near-term factors, including Year 2000 fears and continuing economic issues, are creating cautious buying trends in Europe, Latin America and Asia. In addition, there is intense margin pressure, primarily in the United States, which is related directly to increased price competition and not related to changes in the way computers are brought to market." So, rather than the $0.42 per share that Wall Street was expecting from IM, the company says that profits will be in the $0.27 to $0.30 per share range. Revenue will grow at a good a good 26% to 30% rate from the prior year quarter, they just can't make as much profit off that. In the year ago period, IM made $0.39 per share, more than they will make this year. But that revenue growth figure also reflects a slowdown. In 1998, revenue for IM grew 33%. So, yes, we will add IM to the growing list of technology companies that seem to be affected by less-than-expected growth in the computer industry. Yesterday, Advanced Micro said that first quarter K-6 shipments in the first quarter would be at most 5 million rather than the 5.5 million expected due to production problems, and some readers questioned our conclusion that this also reflects a slowdown in demand. But Advanced Micro also implied that shipments in the second quarter would be only a little above 5 million, and there are presumably no production problems planned for that yet to start quarter. Prior to yesterday's statements, Wall Street had been expecting shipments to grow from the previously expected 5.5 million rate. Rising profit forecasts through the year also reflected expected increases in demand. But Advanced Micro says they "believe they will meet (their) goal of shipping 20 to 25 million processors this year." That is less than previously expected, especially given recent expectations of a full 5.5 million in the first quarter alone and further growth from there. There is more to the equation at Advanced Micro than a production problem in January and February. So, there are continued signs of slower growth in demand in the technology markets. Today, IM gets added to the list, which of course is topped by Dell and Compaq. The overall market has strong bullish momentum and doesn't care much. IM is likely to be impacted today, but broader implications will be dismissed. Briefing.com does wonder though. |
