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THE WEEK AHEAD: Earnings will provide reality check

After another brutal week of trading, technology investors can only hope that earnings from Solectron, Micron and several others will reverse this intense sell-off.

For the week, the Dow Jones industrial average fell 279 points to 10,435.72 while the Nasdaq composite plunged 261 points to finish at 2,654.42.

Microsoft (Nasdaq: MSFT) became the latest and, perhaps, the most significant company to warn of slowing sales and earnings this quarter.

Even some good news from Oracle (Nasdaq: ORCL) couldn’t offset the horrendous outlook for the majority of chip, PC and software companies this quarter.

“There's no way to really candy-coat this,” said William Epifanio, an analyst at JP Morgan. “The weakness that we were seeing in the consumer PC business has spread into the corporate sector.”

Clearly, the days of tech stocks trading at sky-high valuations are over.

With a couple weeks left before year’s end, look for portfolio managers to do a little window-dressing.

Looking ahead to next week, investors can expect some good and bad among a barrage of earnings reports.

  • Solectron (NYSE: SLR) should show strong earnings in its first quarter even though it did temper its outlook after posting strong sales and earnings last time around.

    First Call Corp. consensus expects it to earn 28 cents a share in the quarter.

    Last quarter, it earned 27 cents a share on sales of $4.7 billion.

  • Jabil Circuit (NYSE: JBL), another contract electronics manufacturer, should also post strong results in its first quarter.

    Analysts are expecting a profit of 26 cents a share, up slightly from the fourth quarter when it raked in $47 million, or 24 cents a share, on sales of $1.1 billion.

  • Micron Technology (NYSE: MU) has taken its lumps with the rest of the chip sector in recent months, losing more than half its value in the past three months.

    First Call Corp. consensus expects it to earn 66 cents a share in the first quarter.

    In the fourth quarter, Micron earned $727 million, or $1.20 a share, on sales of $2.6 billion.

  • Micron Electronics (Nasdaq: MUEI) will tell investors just how bad things were in its second quarter next week.

    Earlier this quarter, Micron Electronics, along with the rest of the PC world, warned that it would miss analysts’ estimates this quarter.

    Company officials said it now expects to post sales of between $385 million to $400 million in the quarter and earnings of between 1 cent to 4 cents a share.

    First Call’s official estimate is 2 cents a share.

  • 3Com (Nasdaq: COMS) also warned earlier this quarter so analysts adjusted their second-quarter loss estimate to 18 cents a share.

    Last quarter, the network-equipment maker lost $41.3 million, or 12 cents a share, on sales of $933.8 million.

  • Palm (Nasdaq: PALM), once the shining star of the 3Com universe, will also report its second-quarter results next week.

    Analysts are looking for a profit of 4 cents a share.

  • Cyberian Outpost (Nasdaq: COOL) is expected to post a loss of 20 cents in its third quarter as it joins the growing legion of struggling dot-coms searching for hope in an ugly market.