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Tech stocks face hard road
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January 21, 1998: 10:25 a.m. ET
Tech analyst anticipates weaker earnings well past the first quarter
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NEW YORK (CNNfn) - The outlook for technology companies is poor and weakened profits could continue well past the first quarter of 1998, one technology analyst said Wednesday.
"Just because [technology companies] are giving warnings about the first quarter, there's absolutely no reason why that should not extend," said Du Pasquier & Co.'s Elliot Glazer.
Asia's effect on Europe will be partly to blame, said Glazer. Many of the technology companies that reported strong earnings in the fourth quarter, such as Intel and Adobe, made surprise gains in Europe, which, in turn, made up for Asian losses.
But currency devaluations in Asia are forcing European producers to cut prices, which likely will reduce the outlook for companies like Texas Instruments and IBM.
Glazer warned against investing in technology stocks for the immediate future.
"The only way you can make money is to look at those technology stocks that have already gone down steeply," said Glazer. He cited Seagate, whose losses were not as bad as Wall Street anticipated, but he had little else to recommend.
"The stock market has sort of discounted the Asian problem, hoping it's over," said Glazer. But "this could go for quite some time."
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