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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (13925)	3/13/2002 2:44:25 PM
From: Fred Levine	Read Replies (2) \| Respond to of 17183

From: The Street Read the good part abt. EMC --- IT Managers Not Buying Recovery By Diane Hess Staff Reporter 03/13/2002 01:25 PM EST Far from pulling out their wallets, information technology buyers are actually getting more pessimistic, a new study finds, further clouding the prospects of a technology recovery. In a poll of 100 IT executives from Fortune 1,000 companies, Goldman Sachs found that the number of respondents who foresee a return to normal spending in 2002 actually fell from January to February. "Although IT managers have extensive wish lists, a significant spending rebound, even in the back half of the year, feels increasingly unlikely," Goldman Sachs analysts said. Two-thirds of the managers on the panel said that normal spending would not return until 2003 or beyond. "We expected the new survey to show a degree of incremental tightening as key end markets, such as communications and financials, have continued to struggle in 2002," the analysts said. Big Piece The communications and financial sectors comprise 40% of total IT demand, according to Goldman. And both sectors have yet to see the kind of rebound they were hoping for earlier this year. On Tuesday, Lucent (LU:NYSE - news - commentary - research - analysis) cut its revenue outlook and said it won't be profitable until 2003, as a result of a slowdown in spending by telecom customers in recent weeks. The news came as the communications sector has been under pressure, not to mention investigation, with Securities and Exchange inquiries into accounting practices at WorldCom (WCOM:Nasdaq - news - commentary - research - analysis) and Qwest (Q:NYSE - news - commentary - research - analysis). Even BellSouth (BLS:NYSE - news - commentary - research - analysis), which is considered a safe haven in the communications sector, was forced to reduce its earnings expectations and lower its outlook for capital spending by $500 million in 2002. Eeyore "It's going to be a gradual recovery," said Shebly Seyrafi, an analyst at A.G. Edwards. "People were optimistic that it would happen more quickly; now, reality has set in that it's not." Seyrafi is nonetheless optimistic that there will be a meaningful rebound by the end of 2002 and beginning of 2003. Among the survey's other findings: Two-thirds of the respondents said their ability to get favorable pricing terms from vendors is still growing, indicating that buyers continue to hold the upper hand. According to the survey, the top five IT priorities are disaster recovery, security software, core enterprise resource planning software, security hardware and Windows 2000 and XP operating systems. The survey named companies with an edge in the campaign for IT spending dollars. Among computer boxmakers, Dell (DELL:Nasdaq - news - commentary - research - analysis) was in front of the competition, with IBM (IBM:NYSE - news - commentary - research - analysis) behind it. About 40% of Dell customers said it is gaining share of their IT spending dollars, the survey said. In the storage space, EMC (EMC:NYSE - news - commentary - research - analysis) is leading the charge for IT spending dollars. "Our checks point to some early, isolated instances in which EMC may be winning back customers," the survey said. fred