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To: Sam who wrote (5752)	3/1/1999 9:07:00 PM
From: LK2	Respond to of 9256

Micron Tech, a smallish PC maker, warns of slower sales after the bell------- Posted on the AMAT thread----- Message 8094938 Talk : Semiconductors : Applied Materials [AMAT] To: Brian Kerecz (28691 ) From: Brian Kerecz Monday, Mar 1 1999 6:26PM ET Reply # of 28700 After the bell: Micron Electronics Inc. (MUEI) 14 7/16 +1/16: direct marketer of PCs warns that fiscal Q2 sales and earnings to be below Q1 levels; expects Q2 sales to be down 6% to 9% below Q1 level of $403.5 mln due to slower PC sales; according to First Call, company was projected to earn $0.14 in Q2, vs profit of $0.12 in Q1; see press release..... Article giving details of MUEI warning (URL supplied by Gottfried)----- For Personal Use Only >>>>>>>>>>>>>>>>>>>>>>>>>>>>>> cbs.marketwatch.com Micron Tech sees second-quarter slowdown By Tiare Rath, CBS MarketWatch Last Update: 6:47 PM ET Mar 1, 1999 Tech Report Hardware Stocks NAMPA, Idaho (CBS.MW) -- Direct personal computer vendor Micron Electronics threw another bucket of cold water on the PC industry late Monday, saying it expects a second-quarter slowdown. Micron Electronics (MUEI), whose parent company is Micron Technology (MU), said after the market closed Monday that its second-quarter income and sales will probably fall below what it achieved in its first quarter. The company earned 12 cents a share in its first quarter, and analysts anticipated it would make 14 cents a share in its second quarter. Micron Technology said sales in the second quarter will fall 6 percent to 9 percent from its first quarter. Sales in the first quarter were $403.5 million. Intel to blame The company said the "late-quarter timing" of Intel's (INTC) Pentium III chip release, which was brought out for sale Friday, resulted in purchase deferrals. Micron Electronics' Chairman and Chief Executive Joel Kocher said a large percentage of its customers are "power users" who want to wait for new technology and were tempted by Intel's promotion of its Pentium III processors. "The major issue was Pentium III," Kocher said. "Unfortunately for us, the timing could not have been worse." But the company said it will probably benefit from Pentium III sales in its third quarter. Gross margins down Personal computers for consumers will also hurt Micron Electronics' gross margins, or profit as a percentage of sales, in the segment, executives said. The company sees gross margins from its consumer line at 14 percent in the second quarter vs. 15 percent in the previous quarter. Executives said pricing competition heated up during the quarter with computer sellers Compaq (CPQ) and Dell (DELL) in the consumer and small office and home office market. Computer stocks have been the victims of selloffs over the past few days as investors worry that sales and profits aren't going to be up to par during the quarter. See related story. Although Micron Electronics is a smaller player in consumer PC sales, news of pricing problems could give investors shivers. See technology stocks. In the future, Micron plans to orient its business more on commercial and business sales, the company said. Kocher said Micron will be "above market growth" in its fourth quarter. Expenses will also be $2 million to $3 million higher in the second quarter as compared with the first quarter, Micron Electronics said. The company cited higher costs for beefing up its sales force and ad dollars. Tiare Rath is a reporter for CBS MarketWatch. © 1997-1999 MarketWatch.com, Inc. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<