In a move that many in the Mac world might find amusing, Wall Street analyst firm Donaldson Lufkin & Jenrette lowered the 4th quarter projections of several leading PC manufacturers due to concerns that Y2K troubles would lower IT expenditures. Noticeably absent from the list was Apple whose projections were not changed. According to Reuters:
Donaldson Lufkin & Jenrette said Tuesday its technology research team lowered fourth-quarter earnings estimates for several big computer companies, projecting a slowdown in corporate spending due to the Year 2000 problem.
In a research note, the analysts said they expected a 2 percent year-over-year decrease in information technology (IT) spending, based on a survey of corporate information technology officers. They said about 22 percent of those surveyed expected to curtail spending during the fourth quarter due to computer problems associated with the changeover to 2000.
DLJ lowered earnings estimates on International Business Machines Corp. (NYSE:IBM - news), Compaq Computer Corp. (NYSE:CPQ - news), Dell Computer Corp. (Nasdaq:DELL - news), Hewlett-Packard Co. (NYSE:HWP - news), Sun Microsystems Inc. (Nasdaq:SUNW - news), and EMC Corp. (NYSE:EMC - news). They are all do substantial personal computer and network hardware business that is dependent on corporate IT spending.
Estimates were unchanged on Apple Computer Inc. (Nasdaq:AAPL - news), Gateway 2000 Inc. (NYSE:GTW - news), Ingram Micro Inc. (NYSE:IM - news) or Tech Data Corp. (Nasdaq:TECD - news) because they have limited dependence on IT spending.
Apple seems to benefit from not only its superior handling of the year 2000 in the MacOS, but from its lack of a major presence in the corporate world.
Despite this news, Apple's stock has been dragged down with the other PC companies who all fell sharply throughout the day.
Check the Apple Stock Watch Special Report for other news relating to Apple's stock.
The Mac Observer Spin: It is annoying that this report on Apple's competitors looks to be bringing Apple's 6 day streak on increases in the stock. But, when traders get scared in a sector, they often bring the entire sector down.
We think it is a definite possibility that Apple could actually benefit from Y2K, especially as get closer. While major companies are not in the least bit likely to suddenly switch to a Mac based network, many smaller companies could implement Macs as they see all the Wintel caused problems around them. [Editor's Note: Most Y2K problems are centered around older mainframe computers, and not personal computers.] Time will tell.
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