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Technology Stocks : TECD - Tech Data -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (379)	2/2/1999 5:52:00 PM
From: Sun Tzu	Respond to of 584

FYI, Briefing.com 02/02/99 TECH DATA CORP. (TECD) 20 11/16 -11 1/8. The downward trend in this distributor of technology products continues as the stock has run into heavy selling today following an earnings warning. In January, the stock lost close to 29% of its value as just about every day the stock moved lower. Today, it islosing more than 34.5% of its value as investors have really soured on the stock . This morning, the company announced that it expects Q4 earnings to be in the range of $0.61 to $0.64 a share, shy of the First Call mean estimate of $0.69 a share. For Q1, Tech Data sees earnings between $0.52 and $0.57 share, again below the current First Call estimate of $0.61 a share. And for the year 2000, Tech Data is projecting earnings of $2.30 to $2.40, which is at a minimum forty cents below the current mean estimate. Hence, the earnings growth outlook for this year is expected to slow below the 20%-plus rate that had been anticipated as the company is experiencing the effects of a more competitive "gross margin environment in North America and selected markets in Europe" which is taking its toll on the bottom line. While many things could change between now and the end of the year, Tech Data seems to be undergoing a very rough period at a time when many its customers (corporations) should be experiencing an increase in demand for integration and assembly services. Unfortunately, the more competitive landscape is forcing Tech Data to be more sensitive to prices, forcing the company to run faster just to stay even. This latter event is best highlighted in the latest quarter (Q4) when sales increased by 80% to more than $3.8 billion, but the company still fell shy of expectations. Thus, until margins can again expand, Tech Data will need to be very aware of keeping its costs in check, otherwise its earnings will suffer even more.