Lehman Brothers lowered earnings estimates for tech titans Intel (INTC ) and Dell Computer (DELL ).
Analyst Dan Niles thinks that by the end of the fourth quarter, both unit demand and pricing were more difficult than even the pre-announced expectations for the PC industry. Additionally, as Fortune 500 companies finalize information technology (IT) budgets for 2001, Niles believes growth will be 3%-5% below the current 10% forecast. Because of this -- and with PC channel inventory increasing -- the analyst cut his $1.40 2001 earnings per share estimate for Intel to $1.30, and his calendar 2001 forecast for Dell to from $1.10 to $1.00.
Niles offered a gloomy outlook, saying that it seems more aggressive pricing is not spurring much increase in demand, resulting in a trade-off between profitability and revenue growth for these tech leaders.