Earnings season kicks into high gear next week with bellwethers such as IBM, Intel, AMD, Gateway and Siebel Systems all scheduled to report their first-quarter numbers.
With the notable exception of IBM (NYSE: IBM), most of the big-name chip and PC makers have already watered down their sales and earnings expectations for the quarter in the wake of a dramatic slowdown in technology spending by companies large and small.
This week's batch will not only give investors a better idea of how bad things are going to be for the next few quarters, but it will also give a sneak preview of what they can expect from major customers and suppliers of these firms.
IBM managed to avoid the profit-warning plague this quarter and thus far shares have held up quite nicely despite the carnage throughout the rest of the sector.
In January, IBM not only delivered strong first-quarter earnings but affirmed its outlook for 2001.
In the first quarter, IBM pocketed $2.7 billion, or $1.48 a share, on sales of $25.6 billion.
Analysts are projecting a profit of 98 cents a share this time around on sales of $20.8 billion.
Intel (Nasdaq: INTC) and Advanced Micro Devices (NYSE: AMD) next week will tell investors just how lousy their first quarters were and, in the process, shed some light on the earnings prospects for major PC vendors.
Intel earned $2.6 billion, or 38 cents a share, on sales of $8.7 billion in its fourth quarter, a down quarter by its lofty standards.
Worse, it warned that sales and earnings for the first quarter would fall short of analysts' estimates and that it would lay off 5,000 employees.
First Call consensus expects Intel to earn only 15 cents a share in the first quarter on sales of $6.58 billion.
AMD shares went in the tank after missing analysts' estimates in its fourth quarter when it returned a profit of $177.9 million, or 53 cents a share, on sales of $1.17 billion.
However, AMD shares recovered in the later part of the first quarter, and analysts expect it to pocket 33 cents a share on sales of $1.12 billion this quarter.
Vitesse Semiconductor (Nasdaq: VTSS), which derives the vast majority of its sales from network-equipment makers such as Cisco Systems (Nasdaq: CSCO) and Lucent Technologies (NYSE: LU) is going to post disappointing numbers this quarter.
Earlier in the quarter, Vitesse executives lowered their second-quarter sales and earnings estimates, a clear signal that all is not well in the network-equipment sector.
The maker of high-speed communications chips easily topped estimates in its first quarter, raking in $47.6 million, or 25 cents a share, on sales of $165.1 million.
First Call consensus expects it to earn 10 cents a share on sales of $126 million.
Siebel Systems (Nasdaq: SEBL) will check in with its first-quarter results next week with analysts forecasting a profit of 14 cents a share on sales of $572.6 million.
The application software vendor earned $106 million, or 20 cents a share, on sales of $581.6 million in the fourth quarter.
But its shares have lost more than half their value in the past three months, falling from $80 a share in January to below $40 this week.
Gateway (NYSE: GTW) already warned that it will be lucky to break even this quarter on dramatically lower sales.
A management shakeup and a return to its core PC business have done little to inspire investors.
Analysts expect it to lose a penny a share on sales of $2.02 billion this quarter.
Last quarter, it dropped $94.3 million, or 29 cents a share, on sales of $2.37 billion.
eBay (Nasdaq: EBAY) finds itself as one of the few Internet stocks that Wall Street actually cares about anymore. The online auctioneer is projected to earn 8 cents a share on sales of $148.7 million this quarter.
Last quarter, it made $25 million, or 9 cents a share, on sales of $134, easily topping analysts' estimates.
PMC-Sierra (Nasdaq: PMCS), i2 Technologies (Nasdaq: ITWO) and RealNetworks (Nasdaq: RNWK) will also report their earnings next week.