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Technology Stocks : eMachines (Nasdaq: EEEE) going public! -- Ignore unavailable to you. Want to Upgrade?

To: dkgross who wrote (68)	1/17/2001 3:27:53 PM
From: David Lee Smith	Read Replies (1) \| Respond to of 122

Worst may not be over for staggering computer makers By Nicole Volpe NEW YORK, Jan 17 (Reuters) - Computer makers have killed much of the suspense surrounding their fourth-quarter earnings reports, saying demand for computers fizzled at the end of last year, but investors are eager for an updated peek at the 2001 outlook. ``Will the companies -- many of which have pre-announced (earnings) shortfalls already -- lower their forward-looking guidance?'' asked Bear Stearns analyst Andrew Neff. ``We think the answer to this question is yes.'' Personal computer makers Apple Computer Inc. (NasdaqNM:AAPL - news) and Compaq Computer Corp. (NYSE:CPQ - news) have said their profits and sales for the December quarter will be lower than Wall Street had expected. Personal computer maker Gateway Inc. (NYSE:GTW - news) and printer and computer maker Hewlett-Packard Co. (NYSE:HWP - news) have also said the December quarter was a disappointment, and they have expressed caution about 2001. Analysts are looking for a clearer picture of the coming year in the earnings reports and in earnings conference calls by company executives. ``The key for investors is assessing when estimates are going to stop declining,'' Neff said. Wit Soundview analyst Gary Helmig said, ``I'm planning on listening to what the outlook is going to be. I don't know that all the worst news for commercial PCs is out. If IT (information technology) budgets are going to come under pressure, things like upgrading PCs, or upgrading to Windows 2000, can be postponed.'' Last week, Hewlett-Packard cited weaker corporate spending when it warned that its fiscal first quarter sales and profits would fall well short of expectations. It cited lower consumer demand as well as a deceleration in corporate demand. Neff said the Hewlett-Packard warning raised questions about other companies that sell systems for electronic business. He cited computer server maker Sun Microsystems Inc. (NasdaqNM:SUNW - news), data storage company EMC Corp. (NYSE:EMC - news), and International Business Machines Corp. (NYSE:IBM - news), the world's largest computer maker. ``Clearly, the outlook for these three companies (due to report earnings over the next two weeks) are dicier given the comments from (Hewlett-Packard) as well as Cisco about the economic environment,'' he said. Last week, Cisco Systems Inc. (NasdaqNM:CSCO - news) Chief Executive John Chambers said the current quarter had been ``a little bit more challenging'' than the company, the leading supplier of Internet networking equipment, had expected, amid slower capital spending. IBM, which is to report fourth-quarter results after the market close, has given no indication of any slowdown in its business. Analysts expect sales of $25.5 billion for the quarter, according to First Call/Thomson Financial. Analysts' consensus earnings forecast is $1.46 per share, up from $1.12 in the 1999 fourth quarter. Dell Computer Corp. (NasdaqNM:DELL - news) has also kept quiet about whether its business is slowing down. Analysts expect the company to report fourth-quarter sales of $8.69 billion and earnings per share of 25 cents a share, according to First Call. Dell earned 15 cents a share a year earlier. Sun has also stuck to its guns regarding its fiscal second quarter, saying sales will rise by more than 40 percent. Analysts have generally supported that expectation but have cast doubts on Sun's medium- to long-term ability to continue growth at hot historic rates. Many analysts recently cut their investment ratings or earnings forecasts for Sun due to fears about rising competition and wary clients waiting and watching the economy before committing new spending. Sun, due to report its results on Thursday, is seen turning in sales of $5.29 billion, just shy of a 50 percent rise from a year earlier, and earnings of 16 cents a share, up from 11 cents a year earlier, according to First Call/Thomson Financial. Last week Hewlett-Packard forecast earnings of 35 to 40 cents a share, compared with Wall Street's consensus forecast of 42 cents. The company said its revenue growth would be in the low to mid-single digits. ``We're seeing less growth than we anticipated across the board,'' Chief Executive Carly Fiorina said. Credit Suisse First Boston analyst Kevin McCarthy said computer hardware stocks are currently trading at a mid-teens multiple to depressed earnings expectations, which he said will probably mark the valuation low of the group.