Gateway earnings affected by pre-Y2k order delays; down 8 1/4 after hours : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Gateway Falls After Earnings Warning: After-Hours Trading

Gateway Falls After Earnings Warning: After-Hours Trading

New York, Jan. 5 (Bloomberg) -- Gateway Inc. fell in after- hours trading after the No. 2 direct seller of personal computers said it will miss fourth-quarter earnings estimates because of slower revenue growth.

San Diego-based Gateway declined 8 1/4 to 54 in extended trading. In regular New York Stock Exchange trading, Gateway fell 11/16 to 62 1/4.

The company said purchase delays caused by concern about the century date change and a tight microprocessor supply squeezed revenue growth. Gateway said it expects fourth-quarter earnings of 42 cents a share before a charge. Analysts polled by First Call/Thomson Financial expected 49 cents.

Other computer makers, including Dell Computer Corp. and International Business Machines Corp. dropped after the Gateway announcement. Dell fell 1 11/16 to 48 1/4 and IBM dropped 2 1/4 to 116 after exchanges closed.

In regular trading, Dell gained 3 5/16 to 49 15/16 and IBM rose 6 3/16 to 118 1/4.

March futures on the Standard & Poor's 500 Index fell 6.00 to 1407.50, suggesting the Index will open 0.5 percent lower when trading begins tomorrow. Nasdaq 100 March futures fell 33.50 to 3479.00.

The following is a summary of active stocks in trading after the close of exchanges on Island ECN, an electronic trading system which trades from 8 a.m. to 8 p.m. New York time.

Stock Last Price Volume Move From Close Amresco Inc. 2 883,993 +23/32 Aastrom Biosciences 1 3/32 699,694 0 Cobalt Group 18 651,127 +7 1/2 Euroweb Int'l 17 15/16 198,652 -2 3/16 Dell 47 15/16 70,146 1 15/16

-- Karina Lahni, Sara Pepitone and Cecily Barnes in the New York newsroom (212) 318-2300 with reporting by John Stebbins/nh

-- eggman (, January 05, 2000


Look for the makts to TANK BIG TIME tomorrow... another one of the legs has just been pulled out... dot.coms are screwed & now this, the hardware guys...

-- is-it-worth-it (, January 05, 2000.

Yes, the markets are toast. They will crash and everyone will die. Vindication is finally at hand.

-- (give@it.arest), January 05, 2000.

Gateway is lying. Y2k was nothing but good for pc makers. It's the *conclusion* of corporate buying *for* y2k that is hurting them.

-- Me (, January 05, 2000.

One item attributed to the Gateway situation is that there is a "non- availability of certain chips in batch price quantities". A Gateway source was saying something like "We won't allow the options on our products to be dictated by suppliers not providing the parts we need".

Huh? I thought that couldn't happen. How and why could there be a chip shortage? After all, the Taiwanese earthquake is old news and Taiwan has earthquakes all the time, doesn't they?

Could it be that there's been a Y2K related drop in production due to problems with manufacturing systems? Some sort of embedded devices problem, maybe? Or perhaps an inventory management system which hasn't adequately predicted the requirements because it computed no demand after rollover, because it saw invalid dates?

Watch this issue, folks. Look to see if the background issues to get repeated with other tech firms mentioning parts problems affecting their production.

Only three business days into Y2K and there are words from the manufacturers which seem to indicate the system is showing cracks. Think it'll take until the end of the first quarter at this rate?


-- Wildweasel (, January 05, 2000.

The chip thing is probably 90% excuse, 10% reality. See Apple's recent shift of blame to Intel subsequently denied by Intel.

No company wants to admit they fell short of the mark due to intrisic problems, not in this environment.

-- Me (, January 05, 2000.

Today from William Fleckenstein's Contrarian article:

"Nuclear winter, you recall, had nothing to do with the Y2K date change, but had everything to do with the anticipation of problems revolving around the date change. It caused corporate America and everyone else to buy gobs of hardware, so they're not going to need to purchase more for an extended period of time. But there I go delving into fundamentals again, and they're not that important at the moment - although they soon will be."

Is Fleckenstein on target regarding Gateway?

-- dinosaur (, January 05, 2000.


Give that man (Fleckenstein) a cigar!

-- Me (, January 06, 2000.

I got this info from a friend at Gateway after not recieving my software order for six weeks.He told me that the system they used for shipping and recieving was down,and that they were doing every thing the old way---manual,this was causing the delays,and now a lack of potential earnings. its just starting folks

-- paul mika (, January 06, 2000.

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