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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Elwood P. Dowd who wrote (88821)	1/12/2001 6:42:11 AM
From: hlpinout	Respond to of 97611

January 12, 2001 Tech Center IBM, Sun Micro Expect Higher Net Despite Slowdown, Weak PC Sales By WILLIAM M. BULKELEY Staff Reporter of THE WALL STREET JOURNAL Makers of large computer systems are likely to report earnings for the quarter ended in December that topped the weak year-earlier period. Those results are expected despite the recent economic slowdown and a sharp downturn in personal-computer sales at Christmas. Still, "a sales slowdown to levels below expectations has hit all the companies very suddenly," says Jay P. Stevens of Buckingham Research. Indeed, Hewlett-Packard Co. warned investors late Thursday to expect earnings of 35 cents to 40 cents a share in the first quarter ending Jan. 31, below previous guidance, because enterprise customers have become "increasingly cautious" about information-technology spending. Computing Earnings Fourth-quarter earnings per share 1999 2000 Estimate Percent Change IBM $1.12 $1.46 +30.4 Compaq 0.19 0.28 +47.4 Sun 0.11 0.16 +45.5 Unisys 0.46 0.41 -10.9 NCR 0.75 1.14 +52 Source: First Call A First Call/Thomson Financial survey of 17 analysts had predicted H-P would earn 42 cents a share in the first quarter. In a statement, H-P said it expects first-quarter revenue growth in the low to mid-single-digits, and "isn't counting on improvement" during the first half. For the technology group overall, Merrill Lynch says it now estimates 4% profit growth for the fourth quarter, down from a 29% growth expectation coming into the quarter. Meanwhile, sales growth is expected to be slow in the first half of this year, but many analysts see rising sales of large servers and computer services in the second half. Hopes for IBM International Business Machines Corp., benefiting from shipment of a new mainframe line and new storage devices starting in December, is expected to show sharp earnings growth and solid sales growth, before reductions for currency adjustment. John Jones of Salomon Smith Barney estimates IBM's fourth-quarter earnings rose to $1.48 a share from $1.12 a share in the year-earlier period. That is slightly above the First Call consensus of $1.46 a share. Revenue grew 6.3% to $25.7 billion, he estimates. If the euro had been as strong in the latest quarter as it was a year ago, he says revenue would have risen almost 12%. Mr. Jones says that "IBM's new mainframe shipments are a notable positive." He adds that IBM has cleared up some of the production bottlenecks that hurt sales of microelectronics and midrange servers in the third quarter. However, Mr. Jones says he recently cut his revenue outlook, because of IBM's PC business, which accounts for 15% of revenue, and its business making disk drives for laptop makers. Other analysts think IBM's sales growth could be even slower. Laura Conigliaro of Goldman Sachs thinks the business slowdown in December means revenue grew only 3.6% to $25.06 billion. Compaq Computer Corp. announced Dec. 12 that its earnings and revenue wouldn't meet expectations. Analysts now expect per-share earnings of 28 cents a share, up from 19 cents a share in the year-earlier quarter. The company said it estimates revenue for the quarter rose 7% to $11.3 billion, about 10% below earlier expectations. "You have to give management pretty good marks for how they've turned around the business," says Don Young, an analyst with UBS Warburg. "Working against them is the ugliest PC market in at least 10 years." Despite selling the old Digital Equipment Corp. line of large servers and expanding its services business, Compaq gets most of its revenue from PCs. Estimates for Sun Microsystems Sun Microsystems Corp. doesn't have any PC exposure, and it is expected to report a robust quarter, but analysts say its growth is slowing too. For its second quarter ended Dec. 31, analysts expect it to report net income per share of 16 cents compared with 11 cents in the year-earlier period, according to First Call. Revenue is expected to have grown 49% to $5.3 billion. "The growth rate they've had is unsustainable, and comparisons are getting tougher," says Mr. Jones of Salomon, who predicts Sun will start to eat into its order backlog. Unisys Corp., whose results are skewed by its decision to stop selling commodity hardware and government systems, said last month it is comfortable with consensus analysts estimates that fourth-quarter net fell to about 41 cents a share from 46 cents a year earlier. Revenue likely was down slightly from $1.96 billion the year before. NCR Corp. is expected to report that net rose to $1.14 a share from 75 cents, according to First Call. The expected gains reflect strong growth in each of NCR's main businesses: data warehousing, automated teller machines and retail systems, such as point-of-sale terminals. Write to William M. Bulkeley at bill.bulkeley@wsj.com

To: Elwood P. Dowd who wrote (88821)	1/12/2001 9:25:41 AM
From: Jimbo Cobb	Respond to of 97611

LANGUISHING. But market-share leaders Dell and Compaq clearly have the financial stamina and brand recognition to make it through what looks to be a rough year. But it could be considerably rougher for the likes of Micron, No. 11 in terms of PC shipments to North America. The company posted third-quarter earnings of 58 cents, missing Wall Street's expectations by two cents. Its stock has languished in the $30 to $40 range since mid-October, a far cry from its mid-July high of $97. I guess the author doesn't know the difference between MU and MUEI....pretty sad job of journalism.... quote.yahoo.com Jimbo.

To: Elwood P. Dowd who wrote (88821)	1/12/2001 9:29:53 AM
From: Jimbo Cobb	Respond to of 97611

LANGUISHING. But market-share leaders Dell and Compaq clearly have the financial stamina and brand recognition to make it through what looks to be a rough year. But it could be considerably rougher for the likes of Micron, No. 11 in terms of PC shipments to North America. The company posted third-quarter earnings of 58 cents, missing Wall Street's expectations by two cents. Its stock has languished in the $30 to $40 range since mid-October, a far cry from its mid-July high of $97. I guess the author doesn't know the difference between MU and MUEI....pretty sad job of journalism.... quote.yahoo.com Jimbo.