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THE WEEK AHEAD: Investors expecting more bad news

COMMENTARY--On the earnings front, Wall Street will go quiet for a week--call it the calm before the earnings storm. And it will be a storm--more like a hurricane that'll wreak havoc on investors.

It's pretty clear that the first-quarter earnings reports will be dreadful; there's been a record amount of profit warnings so far with more to come.

According to Chuck Hill, First Call's director of research, this week will be the second peak of three peak weeks for profit warnings and earnings pre-announcements.

Investors got a little taste of what's to come this week as Palm (Nasdaq: PALM), Nortel (NYSE: NT), Vitesse Semiconductor (Nasdaq: VTSS) and other firms cut their projections for upcoming quarters.

"The estimates are now clearly in free fall for all four quarters of 2001 for the S&P500 tech sector earnings," Hill said. "The rate of decline has decelerated slightly for the first quarter and second quarter, but could reaccelerate as we move into the peak weeks for pre-announcements."

First Call said profit warnings are on a record pace and when the smoke clears, technology companies' earnings could be down 30 percent to 34 percent for the quarter. Internet portal Yahoo (Nasdaq: YHOO) will kick off earnings season when it reports its first-quarter results April 7.

Analysts are busy trying to guess which companies will issue profit warnings. Leading candidates include enterprise software companies, which rely on end-of-quarter sales to meet expectations.

As Oracle (Nasdaq: ORCL) proved last quarter, things can change for the worse in a hurry.

One company expected to fall short of expectations is business-to-business player Ariba (Nasdaq: ARBA).

"We put a fairly high probability that ARBA will miss first-quarter estimates," said Robinson Humphrey analyst Christopher Rowen. "Furthermore, we believe Ariba's problems go beyond a simple downturn in the economy. Our contacts in the consulting world indicate that troubled implementations and slackening demand for indirect procurement could lead to lasting problems for Ariba."

Wall Street wouldn't be surprised considering Ariba's stock has lost more than 85 percent of its value in the first three months of this year.

Switching gears from the earnings gloom to dot-com doom, Goldman Sachs also kicks off its Second Annual Internet New Media and e-Commerce Conference in Las Vegas.

Headliners at the conference include: AOL Time Warner Chief Operating Officer Bob Pittman, Amazon CEO Jeff Bezos and eBay CEO Meg Whitman. They'll be discussing online travel, online advertising and other hot topics.