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

To: gbh who wrote (57168)	4/23/1999 2:28:00 PM
From: Eggolas Moria	Read Replies (2) \| Respond to of 132070

Some thoughts on Gateway from Kumar at Smartmoney site. But Gateway's results weren't strong enough for U.S. Bancorp Piper Jaffray analyst Ashok Kumar, who lowered his rating from Strong Buy to Buy. Gateway's earnings per share came in two cents below Kumar's forecast. Tougher still, the company's current quarter is traditionally weak. "June is Heartbreak Hill for the company. It has missed Q2 consensus estimates for the last two years. Given that Q2 is back-end loaded, with the last month representing 40% of unit shipments, we think it is prudent to revise our estimates down from 61 cents to consensus estimate of 55 cents," Kumar said in a report Friday. Another concern is the company's small position in PCs costing less than $1,000, the fastest growing consumer market. This segment represents less than 10% of Gateway's shipments, Kumar said. "To maintain share, Gateway will have to proactively address the value segment, where growth will come at the expense of higher priced units. We are concerned with increased competitive pressure emanating from excess Compaq channel inventory and aggressive posturing by Dell in the consumer space," the analyst said. Gateway's weak position in the cheap-PC market, falling prices and "macro weakness" in the United Kingdom (where half of the company's European revenue come from) are factors that "manifest themselves in a malignant landscape," Kumar said. MR .