To: IQBAL LATIF who wrote (19198 ) 8/8/1998 12:11:00 AM From: George Mc Geary Read Replies (2) | Respond to
IQ, here is what the market will react to next week. NEXT WEEK'S EARNINGS REPORTS. There are actually a few important earnings reports still to come. On Tuesday, semiconductor equipment maker Applied Materials (AMAT) is due to report, and on Wednesday CompUSA (CPU) will report. The big one on the schedule, however, is Dell Computer (DELL), due on Tuesday, August 18. AMAT stock popped up over 39 with their last report on May 12, even though earnings were in-line with expectations and they made cautionary statements about the outlook due to the Asian crisis. The stock subsequently fell back to 27 before participating in the recent semiconductor rally. AMAT's report may be particularly important this time because there has been considerable optimism building that the worst is over for semiconductor firms. AMAT could either fuel the optimism, or throw the recent rally for a loop. Computer retailer CPU could also have some widespread impact if there is some indication as to whether PC sales really are picking up, but they are also having problems specific to their company, and probably won't have the impact AMAT does. CPU has already warned that it will post a loss of between $0.15 and $0.20 per share. Then there is DELL. The consensus estimate is for DELL to earn $0.45 to $0.46 per share. DELL, however, is one of the most reliable companies for beating estimates. In early 1997, they beat by $0.16 to $0.18 a share several quarters, and over the past four quarters have beaten by an average of 4 cents. This means that in the days prior to the report, there will be "whisper" numbers as to what DELL will really earn - $0.48?? $0.50?? Who knows. This can lead to a push in the stock ahead of the earnings report, and if they don't come in at the whisper numbers, but still beat the published expectations, the stock can reverse.
