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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF -- Ignore unavailable to you. Want to Upgrade?

To: Jeffery E. Forrest who wrote (14005)	3/19/1998 10:45:00 PM
From: Moonray	Read Replies (1) \| Respond to of 22053

Rockwell Shares Drop on Earnings Warning Thursday March 19 6:48 PM EST LOS ANGELES (Reuters) - The shares of Rockwell International Corp. fell by more than 10 percent Thursday as investors reacted to the company's warning of disappointing second-quarter and 1998 earnings. Rockwell, which has been working to expand its semiconductor systems business, said modem sales would be hurt this year by the transition to a new and faster modem chipset, which was causing some customers to delay orders. "We were surprised that they were having trouble in one sense but we've seen across-the-board weakness driven by dropping personal computer prices," said Bruce Raabe, an analyst with Collins & Co. Rockwell said it expects second-quarter earnings to be about 25 percent below the 71 cents per share earned in the year-ago quarter and that 1998 earnings would be flat in comparison with 1997's $2.89 per share. Before the warning, analysts had been forecasting second-quarter earnings of 74 cents a share and 1998 earnings of $3.18 per share. "It's a pretty major decline in the short term and the full year," said J.P. Morgan & Co. Inc. analyst Roger Threlfall. However, he said he expected the near-term weakness to be followed by "long-term cyclical growth." Threlfall said that because much of the shortfall was associated with a transition to superior modem products, he was cautiously optimistic about 1999 results. "I think they could have a gangbusters business," he said. Rockwell shares, which trade on the New York Stock Exchange, were down $6.06 at $54.44 in consolidated late trading. Along with the weaker-than-expected results in its PC modem business, the company said results would be hurt by a $10 million restructuring charge at its Semiconductor Systems business. It said customers withheld orders for modem products in January and February ahead of its new interoperable v.90 modem chipsets. It also said pricing pressure on its new v.90 product would prevent the semiconductor business from recovering to the extent it had expected in the second half of 1998. "It's disappointing," said another analyst. "The pie is smaller for PCs, and that's a problem." Raabe said confusion among consumers regarding modems hurt Rockwell. "There's a little confusion about faster modems and which format is the best. It's obviously Rockwell this quarter," he said. "Modem prices have dropped fairly dramatically and there's been little brand loyalty," he said. o~~~ O