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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Logain Ablar who wrote (33774)	9/10/2001 10:21:38 AM
From: Clint E.	Read Replies (4) \| Respond to of 68384

Hi Tim.....More signs of price concession in the storage space....EMLX is coming into your price range. Hard not to grab a few shares here and hope for 20-40% profit, since they are truly the leader and perhaps punished enough(down from mid 40s in ~2 months). There is still a chance of them issuing a warning which could put a bottom to the stock price, so any buying here should be only 1/2 to 1/3 position, IMO. EMC says discounts hurting profits By Ted Griffith, CBS.MarketWatch.com Last Update: 6:07 PM ET Sept. 5, 2001 BOSTON (CBS.MW) -- EMC Corp.'s chief executive said Wednesday that the data storage giant's revenue and profits are being hurt by discounts it's offering on software and hardware products. Speaking at SG Cowen's technology conference in Boston, CEO Joe Tucci said EMC is giving discounts to hold on to existing customers and win new ones. He said he's confident the strategy will help EMC remain the No.1 provider of software and hardware for computer data storage. "We're lowering prices and playing for market share," Tucci said. "Prices are falling and [profit] margins are under pressure, but I can tell you we are in an incredibly strong position and we are going to extend our lead." EMC's stock fell 45 cents to $14.50, its lowest level since 1998. Like its counterparts in the technology sector, EMC (EMC: news, chart, profile) has seen its stock plunge this year as investors fret about declining profits and revenue. Tucci offered little hope that business would recover in the current quarter. He said there have been no changes in the weak economic conditions that have contributed to EMC's profit disappointments this year. But once the economy does recover, EMC will be well-positioned for growth, the CEO said. Tucci didn't give specific profit and revenue projections for 2001. Late last week, analyst Gary Helmig at SoundView Technology Group slashed his earnings expectations for EMC for this year to 33 cents per share from 37 cents per share. Helmig lowered his revenue target to $8.4 billion from $8.7 billion. Last year, Hopkinton, Mass.-based EMC posted earnings per share of 79 cents and revenue of $8.9 billion. Helmig also said he expects EMC to do another major reduction of its work force soon. At the end of May, EMC announced it would eliminate 1,100 jobs. But Tucci said EMC has no plans for major layoffs. He said the company will likely do "spot reductions" in some departments, but those cuts will be offset by additions in other areas, such as sales. He said he expects the total number of employees to stay around 23,000 The CEO did leave the door open to sizable cuts, if business deteriorates further. "We'll continue to keep an eye on the economy and, if things get worse, we could do more [job reductions]," Tucci said. As for Hewlett-Packard's announcement earlier this week that it will acquire Compaq Computer, Tucci said the deal appears to be a good "strategic move" for the companies. But Tucci said he's not worried about the potential competitive threat posed by a combined Hewlett-Packard and Compaq. Tucci said EMC might actually benefit because Hewlett-Packard and Compaq could be preoccupied with the merger and unable to focus on loosening EMC's grip on the storage market. "While other companies are doing deals, the consistency of our strategy and the clear value of our products is an advantage," Tucci said. Hewlett-Packard (HWP: news, chart, profile) and Compaq (CPQ: news, chart, profile) officials have said that by combining they would strengthen their position in a number of fields, including computer data storage. Shares of Hewlett-Packard slipped 75 cents to $18.12 while shares of Compaq lost 67 cents to $10.41.