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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (28164)	5/15/1998 8:10:00 AM
From: MythMan	Read Replies (2) \| Respond to of 132070

MOT has been doing this kind of thing for 2 years. <g> Hewlett-Packard: Warning or wake-up? By Binti T. Harvey, CBS MarketWatch Thu May 14 17:00:47 1998 PALO ALTO, Calif. (CBS.MW) -- Investors got a nasty surprise in the form of a profit warning from Hewlett-Packard (HWP) -- and in turn, pummeled the stock in Thursday trading. Even more surprising, however, was Wall Street's lack of foresight, as some analysts upgraded the stock on the eve of the Palo Alto, Calif.-based company's warning that it won't live up to second-quarter expectations. H-P shares plunged 11 3/8 to 70 1/4 after it said earnings will be about 65 cents a share, down from 75 cents in the same period a year ago. The company had been expected to earn 77 cents a share, based on the consensus estimate of analysts surveyed by First Call. Compaq started it H-P attributed most of the shortfall to vicious price competition in the PC industry, triggered after Compaq declared a fire sale to clear its excess inventory. H-P has slashed prices as much as 20 percent on business computers in the past two months, while consumer PC prices have fallen with the growth of the sub-$1,000 PC segment. H-P also cited economic weakness in Asia, which the company said has slowed the growth of its business that makes testing and measurement instruments. Now come downgrades Sure, lots of analysts stampeded to issue negative comments on the stock -- but only after the company warned. J.P. Morgan downgraded the company to "market perform" from long-term "buy," and Lehman Bros. cut it to "outperform" from "buy." Goldman Sachs lowered its opinion to "market outperform," removing the stock from its "recommended list." Several other firms lowered their earnings estimates to match the company's revised forecast, and now analysts say pricing pressures won't get back to normal until the fourth quarter at the earliest. This tune was different from the one sung over the past month, however. Since April, analysts at Prudential Securities, Salomon Smith Barney, Merrill Lynch and Hambrecht & Quist -- to name a few -- have urged investors to jump on the stock based on new order growth, strong fundamentals and recent inventory reductions. CS First Boston even upgraded H-P to "buy" on Tuesday, citing its ability to earn a higher return on capital. What pricing pressure? Despite several obvious red flags, this rampant support propelled H-P shares more than 30 percent higher over the past month, culminating in a historic high of 81 5/8, where it closed before the official warning came out. When H-P's first-quarter earnings fell below estimates for the fourth consecutive quarter, analysts chalked it up to the effects of Asian economic weakness. In March, Compaq warned it would miss estimates, saying it would have to cut PC prices drastically to clear out excess inventory. And yet while analysts acknowledged the likelihood of fallout from an ensuing price war, they reassured investors that H-P would be well-insulated because of its lower inventory levels. Most earnings estimates remained in the neighborhood of 75 to 80 cents a share. To be sure, many analysts still recommend H-P as a good long-term growth stock. The company's percentage growth in profits and revenue is expected to run in the mid- to high-teens in fiscal 1999, and most Street pundits regard it as a core technology holding. While this comes as little comfort to investors who bought the stock in recent weeks on an analyst's recommendation, perhaps it will at least bolster Clueless Investors' confidence in their own instincts. So, after H-P releases its official earnings report Friday, you make the call.

To: Knighty Tin who wrote (28164)	5/15/1998 9:09:00 AM
From: jluker	Read Replies (1) \| Respond to of 132070

Gasp. Michael Burke and TK in bed together :) 08:39 ET Tom Kurlak Speaks: Merrill Lynch's top semiconductor man believes a glut of chips coming onto the market. Expects increased supply to put margin pressure on top chip names, particularly Intel (INTC). Forecasts that PC market can absorb only 1/3 of new capacity hitting the market. Summed up, feels Intel ready to start a price war. Kurlak has been extremely bearish on chip makers for several months now. Most hated is Micron (MU 28 9/16), which he has a $20 downside target on.