Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Brightpoint - CELL -- Ignore unavailable to you. Want to Upgrade?

To: Harry who wrote (1444)	3/12/1999 1:07:00 PM
From: William S.	Read Replies (1) \| Respond to of 1999

biz.yahoo.com Thursday March 11, 12:25 pm Eastern Time Brightpoint falls on earnings warning NEW YORK, March 11 (Reuters) - Shares of Brightpoint Inc. plummeted Thursday after the communications services company warned that its first quarter and full year results may fall short of expectations, due to problems in the Far East and Latin America. Brightpoint's shares, the most active on the Nasdaq, fell $7.06 a share to $6, a 54 percent drop from Wednesday's close. The Indianapolis-based company said revenues for the first quarter will be between $375 million and $400 million, while net income before an accounting change will be around zero. Analysts had expected profits of $0.20 to $0.22 per share, and revenues of between $450 million and $475 million. The company said beginning in late January it had experienced difficulties getting adequate product supply in the Asia-Pacific region, specifically in China and Taiwan. Brightpoint's Latin America division was also hurt by the devaluation of the Brazilian real on Jan. 13. Almost all of the company's transactions in Brazil are real-denominated. Lehman Brothers analyst Michael Ching, who cut his near-term rating on the shares to neutral from accumulate, linked the shortfall to other factors, including lost business in Europe and lower than expected sales to Iridium LLC. ''We believe that the major culprit is actually a much more severe competitive environment,'' Ching, who also cut his long-term rating to accumulate from buy, said in a brief. ''Some competitors have begun lowering prices and offering generous credit terms, which Brightpoint is unwilling to match. This has resulted in some lost business that translates to lower revenues,'' he said. The company said its North America division will generate revenue and operating income consistent with its expectations with demand for its products and services strong. But Warburg Dillon Read analyst Jeffrey Schlesinger questioned whether Brightpoint's domestic success can be duplicated overseas. ''The U.S. market has shown that the value-added model works, but can it be replicated successfully in other markets?'' he said in a note of the company, which distributes wireless telephones and accessory products. ''Pure distribution has little leverage and can be upset by a number of local market factors.'' Schlesinger cut his rating on the shares to hold from strong buy. BT Alex Brown also downgraded Brightpoint shares, lowering its rating to market perform from strong buy. Shares of CellStar Corp. (Nasdaq:CLST - news), which also sells cellular phones and wireless telecommunications products, also slipped, easing $1.75 to 10.94 a share.