Merrill Lynch has cuts it estimates for computer maker Hewlett-Packard Co. (IBM ).
Analyst Thomas Kraemer says the shortfall is due to economic and competitive weakness, but would not extrapolate this weakness to the storage sector. He says the scenario may make it more difficult for International Business Machines Corp. (IBM ) and Sun Microsystems Inc. (SUNW ) to post solid results, and offer a positive outlook.
The analyst adds Hewlett-Packard is not the best proxy for the sector. He also says consumer spending is below conservative estimates, and enterprise IT spending has slowed.
Kraemer cut his first quarter earnings per share estimate to $0.37 from $0.42, and his fiscal 2001 EPS estimate to $1.69 from $1.88. His near-term rating on the stock is neutral, with a long-term buy rating. Shares of Hewlett-Packard were down 1-5/8 at 30-3/4.