Other tech firms not singing Intel blues
Although Intel's revenue warning has sent shockwaves through the tech industry, many companies have chimed in to say their business is on track.
Among PC makers, Compaq Computer and Hewlett-Packard said today that business is in line with expectations. Dell said yesterday that it remains on track to reach its goal of 30 percent sales growth this year.
The statements have bolstered some PC stocks, while Intel shares have fallen 20 percent after the chip giant warned yesterday that its third-quarter sales will be lower than expected because of weak business in Europe.
HP said in a statement that "it remains confident" of meeting its target of 15 percent revenue growth and is comfortable that it can meet consensus analyst earnings estimates of $1.03 per share for the fourth quarter.
Speaking today at the Banc of America Securities conference in San Francisco, Gateway chief financial officer John Todd said that before entering a pre-earnings "quiet period" this week, the company said it was on track to meet Wall Street's earnings estimates.
At the same conference on Tuesday, Compaq chief executive Michael Capellas described a mixed bag, with servers and handheld computers in strong demand but with weakness in corporate sales and in Europe.
"Some segments are extremely strong, but others are getting soft," Capellas said.
Today, Compaq released a one-sentence statement saying, "Our worldwide momentum is clearly continuing, and European demand is currently tracking within our expectations."
Several analysts, including Bear Stearns' Charles Boucher, said today that they continue to see 15 to 17 percent unit growth in PCs this year despite the weakness in Europe.
A big question is whether the problems are hitting Intel extra hard or whether the entire tech sector is at risk. One of the companies that could help clear that up is Intel rival Advanced Micro Devices. But AMD isn't talking, citing a company "quiet period" during the past two weeks of its quarter until quarterly earnings are released.
Until recently, AMD had been saying that it was on track this quarter to double its shipments of Athlon and Duron chips, to 3.6 million units.
If the problems are confined to Europe, analysts say, Gateway should be most immune given that only 6 to 8 percent of its sales come from Europe.
Meanwhile, Texas Instruments, which earlier this week cut its forecast for overall cell phone units, said it does not see any particular negative effect from the weakening euro. Europe accounts for about a quarter of chip sales at TI.
"Our business is good there," chief financial officer Bill Aylesworth told CNET News.com.
Aylesworth said that while a weak currency may mean Europeans will be less likely to buy a PC, it shouldn't hurt cell phone sales, which are often subsidized by service providers.
"Cell phones get sold in a variety of ways," Aylesworth said. "From everything we can see, currency is very much a secondary factor."