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May 18, 2001 
Investors Searching for Earnings We told you yesterday that company earnings will continue to disappoint in the coming months. In fact, according to a Wall Street Journal survey, the first quarter of this year saw the nation's biggest companies put in the worst profit performance in 10 years -- net income was down an average 43%. And today's announcement by Dell and Palm tell us that company earnings woes aren't over yet. Dell slashed earnings estimates for the second quarter by as much as 5%, and it could miss analyst expectations by 3 cents a share. Palm's outlook is even worse. The company cut its revenue projections by half for the current quarter, sending the shares plunging 28% to a new all-time low close. Hewlett-Packard also chimed in this week warning lower than expected revenues because of continued weakness in US and Europe. As the slowdown in the US continues and spreads to Europe and Japan, more company earnings will plummet. Today's market activity shows that investors are starting to waffle about the chances for recovery -- it won't take long before they turn tail and run and stocks nosedive once again. |
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