PC makers hold heads high
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March 5, 1998: 5:52 p.m. ET
Despite Intel's warning, computer manufacturers report strong sales
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NEW YORK (CNNfn) - Intel Corp. may be experiencing weaker orders this quarter but don't tell that to personal computer makers.
Although the giant chip maker said clogged inventories from PC manufacturers have resulted in weaker than expected orders, the computer makers themselves aren't giving any indication of sluggish sales.
"We finished last year with a record year and a record quarter," said Larry Sennett, a Hewlett-Packard spokesman. "We're not hiding our heads beneath the rug."
Similarly, Dell Computer says it sees no signs of a business slowdown.
"We just entered the fourth quarter," a company spokesman said. "Everything still seems good - all product categories, all geographical areas, including Asia."
Sennett added that the slight lag in HP's sales so far this quarter is nothing out of the ordinary.
"We're certainly following a seasonal path from last year," he said. "The first calendar quarter last year was the slowest in year-over-year. But that doesn't mean demand is soft."
Howard High, an Intel spokesman, said that at this point, the chipmaker has no definitive answer as to why its revenues will fall short. Nonetheless, he said the fallout has to be coming from somewhere, and weak inventory among PC makers is the most logical answer.
"We don't have a good understanding right now why our revenues are short," High said. "But we don't see it going to our competitors, and that would indicate that inventories are short."
High added that Intel won't have any definitive answers until it announces its earnings in April.
Stocks for the major PC makers tumbled Thursday in reaction to the news. Dell Computer Corp. (DELL) lost 7-3/16 to finish at 131-7/8. Hewlett-Packard Co. (HWP) dropped 9/16 to 61-15/16 and Compaq Computer Corp. (CPQ) lost 7/8 to 27-1/8.
Despite Thursday's numbers, Sennett said he didn't see any cause for alarm.
"A lot of uncertainty in this quarter has been exacerbated by what's happening in Asian and expanding markets," he said.
"I'm looking at a stock ticker right now. We're down less than a point. Dell, all things considered, is ahead after yesterday. I don't see the panic here. I think people are smart enough to see that."
-- by staff writer John Frederick Moore
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